RANT & CHAT - No Politics

[PMS Witch]

In a perfect world, people's pay will be tightly coupled to the level of value they produce. Pay varies widely because ability varies widely. Few will be productive enough to justify stratospheric incomes, just as few so profoundly lack ability that if they were paid what they're worth, they'd starve. The majority fall between these extremes.

Most people begin their careers at pay levels below average, and with experience improve their skills and productivity levels, which result in an increase in their value to their employer. Pay levels rise as value rises.

Setting a minimum wage has the effect of raising the lowest rung on the career ladder. People who, for whatever reason, simply cannot be hired profitably at the proscribed minimum wage, will not be hired at all. No employer can afford to pay wages at levels above what he can expect to recover through putting the extra pair of hands to work.

The damage to our society caused by a relegating a class of people to be permanently unemployed and eventually unemployable is far worse than any inconvenience experienced by individuals who, for a short time, must accept very low pay levels as they enter or re-enter the workforce. Scrapping minimum wage rates would end providing artificially elevated
wages for the few, but would open previously closed doors for many.

Cheers, PW.

P.S. I posted this on Silicon Investor a few years ago. From time to time the issue gets raised, but suspiciously, most often just before election time. Is it compassion, or politicians playing the Envy Card? When union leaders jump on this bandwagon, I'm doubly suspicious: they're job is to represent their members. How does a higher minimum wage benefit union members? Maybe raising non-unionised pay narrows the gap and thus lowers employer resistance to union formation.

P.P.S. Thank-you to everyone who enjoyed #msg-537374 enough to vote for it.