My article “Ontario’s $15 minimum wage is going to kill more than just jobs” gained traction this past weekend, presumably sought by Ontarians and Canadians rightfully worried that big government is economically trapping us in a corner.
The thing about analyzing any situation logically from first principles is that you inevitably wind up with the exact same conclusions as others that also think critically. Just like mathematics, one can arrive at the same answer at any period in time as long as the fundamental laws are followed. 2 + 2 has always equaled 4, just as it did in the 1980s and in any time period in the past, present or future.
In a video from 1982, Walter Williams dissected the minimum wage laws that were being introduced back then and came to the exact same conclusions I did. I only saw this video yesterday, well after I wrote all my articles about Ontario’s $15 minimum wage, but it goes to show how logic and math will lead to the same common sense conclusions.
On the other hand, minimum wage policy being passed today is built upon postmodern, neo-Marxist doctrine. The ideology adopted by big government not only ignores natural laws of logic and math, it seeks to outright replace them with inconsistent and arbitrary reasoning. After successfully sowing class division between economic classes in the 1980’s and gender and race now in the 2010’s, big western governments and postmodern ideologues insert themselves as the solution of their own manufactured problem, proposing policy that would help achieve unnatural parity within their arbitrarily chosen classes. This strategy grows their power and the people’s dependence on them in a feedback loop: citizens become poorer, more indebted and thus seek more help from big brother to provide for them. I am not being hyperbolic when I suggest that this feedback loop eventually transitions free societies to communism and totalitarianism.
So how do Williams’ assertions of 1982 compare with the assertions I made for Ontario in 2018? Has anyone backing the recent minimum wage intervention made a postmortem analysis of Williams’ argument showing whether the $3.35 minimum wage laws worked? Let’s do a direct comparison between quotes from the video and my article:
From the video:
Government rules and regulations have rigged the economy against poor people.
Back in 1948, before a dramatic increase in the minimum wage law, black youth unemployment was 9.4%. Today, it stays at 50% or more. That isn’t because employers have become more racist […], the culprit here is the minimum wage law.
The minimum wage law is telling our young people that if they can’t produce $3.35 an hour of goods and services then they are not worthy of a job at all. This is so because the minimum wage law requires every employer to pay a worker at least $3.35 an hour no matter how unskilled a worker they may be. However, a businessman has to look at more than that $3.35 an hour. He also has to pay social security, unemployment compensation, and fringes such as insurance.
A lot of 16 year olds just don’t have the capacity to produces that amount of goods and services per hour. […] They’re inexperienced, immature and haven’t formed good work habits. Maybe a teenager can only produce $2 an hour worth of goods and services. It is a losing economic proposition for an employer to pay somebody $3.35 an hour when that person can only produce $2 an hour of goods and services.
From my article:
If they hire workers at $15/hour, employers should expect their workers to work at the current market value of $15/hour. That is, two $15/hour employees should be able to do the work of three $11/hour employees. If all other economic factors remain constant, the artificial inflation in wages will result in a third of low-wage jobs being killed.
In reality, things will play out far worse.
If the entry-level employee gets an immediate 30% raise, then every manager, senior employee, etc. will require a similar raise. Otherwise, why would they want the additional responsibility and time investment if there is no incentive to do so? This would magnify the increase in payroll costs, encouraging more job cuts and price increases.
The increase of the unskilled labor pool through non-standard immigration paths (a disproportionate number of refugees and economic migrants moving in, as opposed to screened immigrants with greatest culture fit and economic potential) has caused a rapid increase of ghettoization. Higher prices and fewer jobs means a lot of unemployed youth in these enclaves are seeking direction and income in an increasingly desperate situation. This leads to the growth of gangs and a dependence on crime and/or welfare in order to survive.
Back to the video:
Nowadays, kids reach the age of 25 without ever having had a work experience. The only profession open to some of them is crime.
If they are going to learn anything that will make them valuable employees in the future, they are obviously not going to learn it from the public school system. At the same time, the minimum wage law denies these kids the alternative of going out and learning job skills in the marketplace. They are cut from learning job skills at school and they are cut out of learning job skills at work. As for protecting the worker, the minimum wage law only protects those skilled enough to be able to produce at least $3.35 an hour worth of goods. People that aren’t skilled enough to produce that value of goods are thrown out of work. They earn $0 an hour.
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