There's What Is...

The gasoline price-hike gives me hope that this time nothing will change. Deep down I know that it will, but what happened last time gives me hope.

When the price of gasoline rose quickly through the three dollar level, and into the fours, do you remember what happened?

Not a whole lot.

We had a lot of people whining and complaining on TV and on the radio, and in print. The oil companies are gouging us! Save us from eeevvvviiilll big OOOIIILLL! But nobody actually went out and did anything. Sure, Toyota is in the process of converting ALL their vehicles over to hybrid, but that’s nothing new. When gas climbed into the $4.20 range, Americans didn’t cut their driving at all. The auto manufacturers didn’t go out and invent fifteen new electric or hybrid cars. Detroit is still trying to convince the average American man that he needs a truck capable of hauling the Statue Of Liberty. The soccer moms are still rolling in their $30,000 SUVs. With the exception of a handful more Priuses on the road, nothing’s changed.

This was the public shaming of the “Bush Went To War For Oil” crowd, but nobody showed up. Too bad.

And that’s what gives me hope. When prices rose last time, NOTHING happened. I fear this time will be different.

Today the federal minimum wage gets a hike up to $5.85 per hour, an increase of $.70, or a little more than one seventh. For a full-time minimum-wage employee, if this first wage-hike were the last, they would be receiving an extra $1,456 per year. In another six months, minimum wage gets bumped up to $6.55. Another $.70 increase. Another $1,456 per year.

In exactly 365 days, business owners will be forced, upon threat of jail or violence, to pay their minimum-wage employees roughly 27% percent MORE do to exactly the SAME work they were doing yesterday. Whereas before your standard minimum wage laborer earns roughly $10,700 before taxes now, they will soon be earning nearly $14,000.

But this is a good thing, right? Right?

For the first time in history, single mothers will no longer have to choose between baby formula and electricity. Families will become self-sufficient. Poverty in America will end. No child will go to bed hungry again.

This is a good thing, right? Right?

No. Because there’s what is, and then there’s what others think should be. There’s the ideal, and then there’s reality. There’s the way it’s supposed to be done, and then there’s what actually happens.

Do you really think there are not going to be consequences for each full-time minimum wage employee being paid an extra $3000 dollars per year? Do you think that every business in American can soak up an extra $3000 loss per minimum wage employee?

This is where I fear the gas-price hike was an abnormality.

Because this time, there will be an effect following the cause.

As businesses are forced (at pain of jail or violence) to pay roughly 1/3 more for exactly the same work, since a business cannot long operate like the federal government and run at a deficit, they will have one of two choices. First, they can pass that new loss onto the customer. Prices have already been rising across the board for the past year. In order to stay in business, companies are going to have to jack their prices up EVEN further, just to make ends meet. They’re still carrying the same product, but now they’ve got an increased overhead. This will hit the retail sector especially hard, as retailers generally run on an incredibly tight budget. In order to survive financially, prices WILL have to rise. Will consumers continue paying, say, a third more for the same product? Of course not. Absolutely not. Hopefully they will, as they did during the gas price hike, or companies are going to face even MORE dire financial straits.

The second course of action is to lay off employees. Imagine, in your place of work, if all the salaries were doubled. Do you really believe all of you would be there a year from now, all earning twice as much for the same work? Of course not. Absolutely not. At some point the market will not bear the price increase and the only way to stabilize the financing is to let some of the employees go. So, in order to support the wage hikes, we’re going to lose some of our minimum wage employees, who will then be unemployed, and because of the wage hike all over, they will find far less work than before.

Meanwhile those employees who were earning MORE than minimum wage will have to pick up the slack of losing some of those minimum wage employees. The same work still has to get done, but now there are less people to do it. Would YOU stay with your current job if they eliminated a quarter of the employees and added their duties to yours, WITHOUT a corresponding increase in YOUR wages? Of course not. Absolutely not.

That’s because there’s what is, and then there’s what others think should be.

If government could tinker with wages as much as they would like, what is unreasonable about setting the minimum wage at $10 per hour? (Wait, Donkey candidate John Edwards wants to do just that!) How about $20 per hour? Why not $50? Why not just give everyone $100,000 every year? That’d be a novel solution to trying to end poverty.

Or, if we’re in the business of discussing moronic government interference, we could, as Donkey candidate Barak Huessein Obama suggests, link the minimum wage to price increases.

This is much like what will happen soon, only his idea involves a continual escalation. As retailers jack up their prices to account for the increased overhead of their employees being paid a third again as much for the same work, the buying power of the minimum wage employee will remain the same. Say they get their 27% more money – if prices rise at a similar rate, what has changed? What. Has. Changed?

This is all incredibly ironic of course, because the Democratic party has two other favorite economic drums that it likes to bang without rhythm. The first is immigration. The recently-killed amnesty bill would’ve legalized 12 million criminal aliens. These newly pardoned, newly minted citizens would thereby be eligible for the minimum wage, becoming as employable as the American citizens their employers favored them over. The whole reason there IS a problem with criminal aliens in this country is because American employers don’t have to pay them as much as non-criminals. Between paying a Mexican $3 to work the fields, or raising their wages to attract Americans, the standard farming organization would rather pay the Mexican. It’s absolutely logical business: What is financially better? Paying your employees $3, or paying your employees $9. What will keep your prices low, and you in business for longer?

The Democratic party wants to make 12 million new citizens, and immediately put them out of work.

The second hobby horse of the Democratic party is the shipping of American jobs overseas. American businesses don’t do this because they like having Pakistanis who don’t speak English running their phone-tech-support services, they do this to save money. They’d rather pay foreign wages to Americans – but American wages are cost prohibitive. So, we run into the problems outlined above: Raising prices, cutting services, firing employees, or closing the doors and turning out the lights. For the second time, a business is not like the federal government – they cannot run forever on a deficit, and when a private individual prints money like it’s going out of style it’s not called devaluing the currency, it’s called counterfeiting.

These are facts. You can raise the minimum wage, but in doing so you’re going to kill businesses, put employees out of work, and raise prices for consumers (who will respond by spending even less of their money). You can ignore the consequences and play havoc with the market over a fuzzy, feel-good idea, but eventually that train will run you over.

Because there’s what is, and then there’s what others think there should be. There’s the ideal, and then there’s reality. There’s the way it’s supposed to be done, and then there’s what actually happens.

There’s what IS, and then there’s what others think should be.