I came across an article today that I posted on my Facebook entitled A Modest Proposal to Ban Volunteering, by A. Barton Hinkle. This was a sarcastic article which pretended to take the side that "If people aren't allowed to work for $7.24 an hour, even if they want to, then they darn well shouldn't be allowed to work for $0 an hour either." The article points out the arbitrary distinction that people make between volunteerism and all other types of work. It's okay to do work for nothing, but as soon as you get paid at all, your paycheck must immediately jump from $0.00 to $7.25. Why the jump? why $7.25? Why not $7.24? To me, it seems very arbitrary and artificial.
This article stirred up a bit of discussion among my friends, and I thought it would be a nice way to introduce my opinion about the minimum wage. I'm sure most people have heard the argument that the minimum wage raises unemployment, but let's flesh out exactly why this is so, and why the minimum wage can harm the very people that it attempts to help. Let's say that I am unskilled, and attempting to find employment. I am hired by some company, and am paid the federally mandated minimum wage of $7.25 per hour. Since I am unskilled, let's say that I am only able to gain the company $5.00 per hour. This means that for every hour that I work, the company which I am supposed to be helping to remain profitable is actually losing $2.25. If I work 40 hours a week, for a year and do not noticeably improve, I will have lost my company about $4,680.00. Not exactly chump change. No business owner in his or her right mind would keep me on. Sooner or later, the company is going to cut its losses and fire me. If I am not able to increase my skill level very quickly, this will happen every place I go within a relatively short period of time. Anywhere I go, I will be fired, because I will always be detrimental to my company.
If, on the other hand, there was no minimum wage, I would be able to accept a wage of $5.00 per hour and work to improve without the imminent threat of termination. As time goes on, and I raise my skill level, I would be able to credibly ask for a higher and higher wage, and seek other employment if I do not get the wage I desire. If I never get to work in any one place for an extended period of time because my skill set is not adequate for $7.25 per hour, I will never be able to improve my work and I will never be able to credibly request higher wages. The truth is, I am better off working for $5.00 per hour than not working at all because the minimum wage shut me out of long-term employment.
Often, people are afraid to do away with regulations that have been in place for a long time because these regulations feel safe. We often see the government as a benevolent force that protects us from harm and unfairness. I don't wish to say that the government is evil, or that the people in the government do not have good intentions. I only wish that people would take into consideration the unintended consequences of many well-intentioned government policies.
Either way, something to think about. I hope that I gave you a new way to look at the topic.
Have a magical day!
In case you wanted to read the the article alluded to above:
http://reason.com/archives/2014/05/26/a-modest-proposal-to-ban-volunteering
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