Church Attendance Law Takes Effect

www.nikitas3.com

President Bush signed a new law requiring church attendance on Sundays. The bill was passed by a bipartisan Congress and was hailed by conservatives as a step toward invigorating the spiritual life of America.

If the above statements were true – which they are not –  there would be hysteria all over America. There would be calls from the secular left about a need for ‘separation of church and state’ and proclamations that we had become a theocratic dictatorship.

Conservative Christians would argue, on the other hand, that this is the best law ever, and that it is going to raise the piety level of our nation in order to make us a better people over the long run.

In fact the headline of this editorial could just as easily read Minimum Wage Increase Goes into Effect, describing the law signed by President Bush in 2007 that raises by 70 cents, effective July 23, 2008, the minimum wage that employers can legally pay their workers from $5.85 and hour to $6.55 an hour.

It is the second of a three-part rise in the minimum, which eventually will go to $7.25 an hour.

The raise was mandated by the federal government. It forces private employers to pay the rate, just as if the government decided to order you to go to church on Sundays. The increase in the wage is seen as a way to make the nation a better place for low-end workers, just as church attendance could be viewed as beneficial for America as a whole, and particularly for the poor. In both cases these are the types of action that the Founding Fathers warned against.

First, a few facts about the minimum wage. Only 2 million workers earn the minimum wage, or about 1.4% of the entire workforce. Few of them are family breadwinners; many are temporary workers or teenagers.

Second, the minimum wage is not a rate that is set in order to give millions of people a living wage rate. If that were true, it would be set at $15 an hour. It is a liberal and union-backed piece of legislation that is intended to do what economists have consistently warned against – giving power to the government to set wages.

Third, those 2 million workers are such a small part of the workforce that it makes you wonder why there is a minimum wage at all. Why can’t the politicians just leave it alone? Why must they meddle everywhere?

What the minimum wage really does is to set a standard against which all wages are paid, and that is its danger. If, for instance, the minimum were raised to $10 an hour, people making $8 or $9 or $10 an hour would demand to have their wages increased because they would not want to be making the same wage as the least skilled among them. So the higher the minimum wage, the more wages in general are pushed up.

This is easy for politicians to do because they usually don’t run the businesses that are affected by coercive policies. Unions favor it because it weakens private enterprise. But business owners know their businesses and know what they can afford to pay, and want to pay their employees. Wages should be left up to the people who pay them.

It sounds like a good idea to mandate that workers be paid more in order to create a more equitable society. But it assumes wrongly that all employers can afford to pay their workers whatever the government says or what the worker wants. This would be wonderful if it were true.

Because most employers do not have drawers-full of money at their disposal, as is conjured up by the intelligentsia in Democrat America who have never run a business. Most businesses operate on a relatively slim profit margin, and they pay their workers whatever their workers are worth, often very well, other times less well, depending on the employee’s value to the company.

If the worker is critical like a good manager who contributes much to the company, the employer may need to – and is happy to pay that worker $75,000 a year so that that worker remains loyal and does not go somewhere else to make more money. If the worker only sweeps the kitchen floor and can be replaced in 5 minutes, the employer may not want to pay him much.

The market should therefore set wages, not the government. If a restaurant wants a pastry chef and offers the job at $8 an hour, it probably will get no applicants. The market may be offering skilled pastry chefs $25 or $30 an hour, because that is what restaurants may be paying, even more in cities. Thus the market will indicate to an employer what wage he should offer.

So if 98.6% of all jobs in America pay more than the minimum wage, does this not contradict the socialist philosophy that capitalist employers are skinflints who will pay their workers as little as possible? If employers are so cheap, why don’t they just pay all their employees the minimum?

The reason is this: In a growing capitalist economy, market wages will direct good employees – and good companies – to prosperity, as it should be. If you leave the market alone, it will pay people what they are worth.

Second, when you raise the minimum wage, people at the minimum wage level lose their jobs by the tens of thousands. This is a proven fact. Because you cannot force an employer to pay a person more for a job than the employer thinks the job is worth. And if the employer says he needs someone to sweep the floor at the minimum wage and that wage goes up, he may decide that it is not worth retaining that person for more money. Job losses are guaranteed as minimum wages – or any wages – rise artificially.

In Europe, where workers are protected by endless layers of legal protection and wage laws, unemployment is 8% or 10% all over, and that is just the official rate. The real rate is said to be much higher. Because when government says it is going to “protect workers”, the opposite happens. Because liberalism always produces the opposite effect of what it says.

This is classic socialism. As unions artificially push up wages for, say, carpenters, fewer people can afford to hire carpenters. Thus fewer homes get built and that means a decrease in the housing supply and a rise in housing prices, further reducing home ownership.

The difference between market wage rates and artificially high government or union wages is always paid by consumers because consumers pay all wages. So the idea that unions or the government help people by getting them better wages is false because that wage is being directly subsidized by someone else. Consumers always pay those higher wages, just as taxpayers pay the higher and higher wages (and thus are made poorer) of unionized public school teachers and other government workers.

George Washington, along with all rational economists, said that business should be regulated, but not over-regulated. And he expressly stated that government should never set wages or prices, that that is far too much interference in the market economy.

Government has ways around this. It relentlessly taxes and regulates and harasses business and favors labor unions, pushing up the cost of doing business and greasing the palms of greedy state socialism and union liberalism. But ultimately, as we are seeing with Ford, General Motors and Chrysler today, artificially high wages for workers can and will force companies, and future generations, out of work, just as states with very liberal and interventionist economic policies like California, Massachusetts and Michigan, are losing jobs rapidly.

The manipulation of the economy by government fiat from the bottom up is a mistake. With so few people affected, the whole minimum wage issue really is a diversion. What these laws do is make some politicians look and feel good but ultimately push people out of work. If a teenager wants to work for $4 an hour, is it better than hanging around doing nothing?

Yes.

And the idea that raising the minimum wage is in the common interest is akin to making people go to church. Higher church attendance would be a good thing in the minds of many, but achieving it through government coercion is not. It may even produce a backlash against the church, just as unemployment is always a natural reaction to increases in the minimum wage.

Liberals believe in making laws to mandate behavior like raising the minimum wage. Our Constitution was designed to protect us against such activist measures by government. Conservatives never would seek to mandate any behavior like ordering people go to church. Conservatives make laws to restrain behavior (criminal laws) and to restrain government (laws to reduce taxes and regulation). Socialism goes in the opposite direction, making laws to empower and expand government influence, all ultimately to the detriment of society as a whole.

We have seen the dismal result of idealistic economic socialism around the globe – poverty, high unemployment, material deprivation, static economies and lost economic opportunities. The liberal approach may appear in the short run to be beneficial to the people, but in fact all such legislation in the long run is counterproductive.

Please visit my website at www.nikitas3.com for more.