Other People's Money

John Edwards wants to bribe voters. But not with his money.

Edwards has stated that the recent minimum wage hike bribe from the Democratic Congress is not enough. He wants to raise it to somewhere around $10 an hour. Edwards is trying to one-up his own party during the run up to the Presidential election.

Minimum wage hikes typically come from Democrats during an election year. Its another ingenious tool where a politician can gain votes by promising somebody else's money. With a minumum wage hike the politicians do not have to budget a dime....they just pass a law and the business owners have to actually pay the bribe to poor out of their own pockets. Pure political genius of course.

Most Republicans have philosophical problems with setting price floors and ceilings. Thats because most of them took Econ 101 in college and are aware of supply and demand curves. They are aware that arbitrary wage floors cause labor surpluses and reduces hiring, especially for unskilled workers. They know that when McDonald's is forced to raise pay they do not eat the loss....they pass it on to every consumer by raising prices on their hamburgers. This is called inflation....and higher unemployment rates for the poor. Workers essentially are paying for their own vote with higher prices on everything they buy.

Republicans do have problems with the other party buying votes with inflation and unemployment. But they go along with it because its better politically in the short run to do so. They can tag along on the bribe, or at least minimize its effect, by voting for it despite their principles. In other words they coward out....every time....because they get bad PR if they do not.

So, we may very well get $10 per hour minimum wage if Edwards is not lying and gains the Presidency. I have to wonder why he doesn't just go for $15 per hour.....because if $10 per hour is good....then $15 is better. In fact....why doesn't Senator Edwards just advocate a minimum wage of $100,0000,000 per hour. That way we could all be rich, we could afford all the health-care we want, we would not have to worry about Social Security not being there, and nobody in America would ever have to work again? Why not give everyone a free steak dinner instead of the free lunch?

The reason of course is because it doesn't work that way. If we mandate $100,000,000 per hour salaries then hamburgers will cost about $75,000,000, businesses will employ very few if any, and we will not really have gained anything except inflation and economic upheaval. There is no legislatively mandated free lunch.

Of course, economic reality works exactly the same way with an arbitrary minimum wage of $10 or $15 except that the inflation, unemployment, and economic upheaval is at a less dramatic scale. The evil is less observable, but its still evil.