On minimum wage, the free market should be able to do its thing

The "Give America a Raise" bus tour stops in Bangor's West Market Square on Monday, March 24. BDN photo by Brian Feulner.

The “Give America a Raise” bus tour stops in Bangor’s West Market Square on Monday, March 24. BDN photo by Brian Feulner.

The latest wealth redistribution plan is picking up speed this election year, complete with the requisite Obamanomics propaganda machine rolling into town. In this case it’s Washington, D.C.-based Americans United for Change bringing in the PR juggernaut on a well-appointed bus. Portland Mayor Mike Brennan and gubernatorial hopeful U.S. Rep. Mike Michaud have jumped on board and are riding it for all it’s worth.

The minimum wage debate has taken some surprising turns. Left-leaning Bill Gates called the minimum wage a “huge trade-off” with lost jobs in an MSNBC interview. “[W]ithin certain limits, you know, it does cause job destruction,” he said. “If you really start pushing it, then you’re just making a huge trade-off.”

And on the other side of the political aisle, Bill O’Reilly has come out in favor of the catchy-sounding $10.10 wage. In California, libertarian Ron Unz is advocating a $12 minimum wage, saying the change would make more jobs currently worked by immigrants more attractive to Americans and curb government spending on social services.

“There are so many very low-wage workers, and we pay for huge social welfare programs for them,” he said in an interview. “This would save something on the order of tens of billions of dollars. Doesn’t it make more sense for employers to pay their workers than the government?”

Meanwhile. the nonpartisan Congressional Budget Office (CBO) predicts yet another Obama economic bomb, projecting the minimum wage increase will kill 500,000 jobs by 2016.

But something interesting is afoot that should silence future debate.

States are going off in all directions on the minimum wage, making them true “laboratories of democracy.” Some are staying with the federal minimum of $7.25 but 13 states raised their wages on Jan. 1. California will be following in July and several more states have the issue under consideration. Even some municipalities are doing their own thing, as Brennan would like to do in Portland. San Francisco has the highest minimum wage in the country, at $10.55, and Seattle is considering a $15 rate.

Raising the minimum wage undercuts the very freedom that makes the American dream work. Employers are not unscrupulous industrialists who greedily hoard profits at the expense of their workers. If you don’t like where you work, you are free to seek employment elsewhere. You can go to school or start your own business, but you are not bound to a company which doesn’t meet your financial needs.

And employers are going to pay a prevailing market wage to hire the people they need. If that means higher compensation to get and retain the best talent or for specialized skills, that’s what they’ll do. That explains why David Ortiz just signed on for a $15 million contract extension with the Red Sox. Is he worth it? The market has decided he is.

The next argument revolves around the definition of a “fair wage.” Who decides what’s fair? $10, $20, $50? And if the government decides that $50 is a fair minimum wage, will the market pay $40 for a Big Mac so that a fast food worker can make what has indiscriminately been decided is a “fair wage?” Shouldn’t free people decide that?

When you purchase goods or services you want to get them for the best price you can. In fact, many of the people who patronize the very businesses targeted by the minimum wage crowd are themselves low-income. They can’t afford to pay more.

If prices increase to accommodate higher wages, who will be blamed? Probably the evil fat-cat CEOs. Ironic, isn’t it?

This minimum wage argument has nothing to do with compassion. It has to do with government interfering with the free market system and the freedom of individuals.

People who go into business risk capital to create opportunity, which in turn creates value, wealth and jobs. Note to Obama: the government didn’t build these businesses, American citizens did. That’s not greed. That’s the realization of the American dream. And every business owner is going to do what is necessary to keep the doors open.

If politicians really want to help the American worker as they claim, they should rein in spending, lower taxes and let them keep more of their hard-earned money. Let the free market do its thing. After all, wealth isn’t measured by how much you earn, but how much you keep.

Susan Dench

About Susan Dench

Susan Dench is the founder and president of the fast-growing non-profit, non-partisan Informed Women's Network. Recognizing that many women are tired of "politics as usual," Susan decided to take action and develop strategies that are innovating the way women and politics intersect, nurturing and encouraging women in fun, energetic gatherings where views can be expressed in a supportive environment and then translated into practical solutions that produce results.