Wednesday, January 10, 2007

a chicken in every pot, once more.

The new assembly of dunces in the House of Representatives wasted no time establishing that they're every bit as clueless about economics than their predecessors. By legislative fiat, they want to magically make more money appear in the pockets of minimum wage workers.

Boy, that'll show the greedy plutocrats! They'll be forced by law to pay their workers more, and Mr. and Mrs. Congresscritter can claim feathers in their hats for "doing something for the working folk". Because Mr. Businessowner is just going to cough up more money, and all will be well, right?

Well, in reality, Mr. Businessman may do no such thing in the long run. While the bill is squarely targeted at mega-retailers (that means "Wal-Mart"), it will impact small businesses in a disproportionate fashion. You see, the majority of business enterprises in this country are relatively small operations. When they're faced with a 40% increase in labor costs, they will do one or all of three things: lay off workers, stop hiring new workers, and increase the price of their product or service to compensate for the added expense. In either case, the supposed beneficiaries of an increased minimum wage end up with the short end of the stick.

If the greengrocer around the corner has three employees, and he needs to lay one off to pay for the 40% salary increase in the other two paychecks, it's a bad thing for his three workers. One will look at a pink slip, and the other two will have to work 40% more to make up for the loss in manpower. In addition, the greengrocer may crank up the price for apples and turnips by a quarter or two a pound to defray the rest of the labor cost increase, which means that everyone who shops there will have to pay a little extra to finance the generous wage increase bestowed on the staff by the benevolent Friends of the Working Class in Congress.

Now, you want to make the greengrocer lay off even more folks, and possibly go out of business or move his shop (and jobs) to a different state? Make him (and all the other evil plutocrats) pay for universal health care for the uninsured.

Once more: you can't legislate yourself free money, and it doesn't matter where you want that free money to appear. It has to come out of someone's wallet, and most often it comes out of the wallets of the same people you're trying to bribe....err, help.

No comments:

Post a Comment

Post a Comment