OPINION – My 15-year-old son has the right idea. He has carried a weekly paper route for the past four years. It has required him to hike the hills of our Cedar City neighborhood delivering to roughly 230 homes in all types of weather.
This past summer he started another job that had him pulling the endless tumbleweeds that grow all around the livestock auction yard. Every time he grabbed his gloves and a bottle of water and trudged out the door into the summer heat, my admiration for him grew. He wasn’t afraid to work.
When we crunched the numbers, it was clear that his hourly wages fell well short of the federal minimum wage of $7.25 an hour, but he’s never complained. While fast food workers in more than 60 cities across the country were striking for a $15 an hour wage, my son was busy gaining experience.
He understands that these are entry-level jobs in which his work ethic is being shaped. It’s never occurred to him to treat them as a permanent position or to lobby his employers for a living wage. What some would consider exploitation, he rightly recognizes as opportunity.
My son may be just 15, but he already understands that some jobs simply aren’t worth the current minimum wage.
It’s a distinction that escapes many adults who should know better. For instance, some California lawmakers are pushing hard to raise the minimum wage in that state to $10 an hour. They believe that they are doing workers a favor by mandating this wage. But as economist Frederic Bastiat noted more than 160 years ago, for each supposed benefit that is immediately seen, there are ensuing consequences that are unseen.
Every employment opportunity is the result of human choices. If your neighbor kid notices that your lawn needs mowing and offers to do it for $10, you may feel it worthwhile to hire him. Even if he charged you $20 to mow, you might still feel that it’s worth the price.
But if your neighbor kid wanted $50 or $100 to mow your yard, you’d likely choose not to hire him — even if your yard needs to be mowed. It’s not a matter of you being a greedy capitalist. It’s a matter of your placing higher value on that $50 or $100 than you do the service that would be provided.
These are the same kind of considerations that an employer must weigh in deciding whether or not to create a job.
If the value created by an employee is not higher than the cost of employing him, then it creates an unsustainable position for the employer. This is why minimum wage laws actually harm the very people that lawmakers claim they will help.
While some workers may celebrate that a higher wage has been mandated, the unseen effect that will follow is that business owners will reduce their employees’ hours, or simply eliminate certain jobs. The higher the minimum wage, the less employment opportunity will be available for lower-skilled and younger workers.
But higher unemployment among these workers is just one aspect of a double whammy that results from government-mandated wage hikes. Another inevitable consequence has potential to affect all of us.
When employment costs are raised, the higher costs of doing business will inevitably be passed on to the customer. Remember this when you’re paying $10 for a simple cheeseburger, fries and a drink.
In a free market, employers benefit when the value created by their employees is greater than their cost. The workers benefit not only from the wages they earn, but, as my son has learned, they also gain valuable experience and skills that provide increased opportunity.
Most importantly, society as a whole benefits when unemployment is low and productivity is high.
Conversely, when minimum wage crusaders prevail, everyone loses. The workers miss out on wages and work experience because of jobs that aren’t created. Employers lose out on the benefit they might have gained from the employee. And the rest of us lose out because those unemployed workers are unable to add their productivity to the economy.
Understanding the necessity of providing value versus demanding a state-mandated minimum wage from employers is the difference between how productive individuals and wage slaves think.
I’m grateful that my son is learning this essential lesson of basic economics early in his life.
Bryan Hyde is a news commentator and co-host of the Perspectives talk show on Fox News 1450 AM 93.1 FM. The opinions stated in this article are his and not representative of St. George News.
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