Monday, January 22, 2007

The Maximum Wage

We in this Enlightened nation formerly marched together in a more familiar cadence. We believed that a free man needed for happiness only his God, his family, and the chance to profit by his own skill at the task to which he turned his hand. The chance to succeed and distinguish oneself, and not to protection from failure, was the thing. But in our distress that anyone should crawl, we now behave as if none should soar. In the ratcheting upward of the Minimum Wage, we see the machinery of rewarded un-achievement, and an artificial limit placed on the ability to succeed. For a certain group of people whose wages it affects, the Minimum is actually a Maximum.

Not everyone in that younger nation accepted the notion of Liberality, of course, but it came to so dominate our thinking that our government performed acts of magnanimity, such as in giving away vast tracts of land to those who would but keep a mule employed thereon. Liberality resulted in Emancipation. Liberality clearly underlies traditional American beliefs in capitalism, that a poor man can earn great wealth, or at least can provide that opportunity to his children, if only given the chance. Liberality springs from the underlying assumption of mobility: if a man can improve his own lot, then our not allowing him to improve shames us. Doing it for him shames him.

All of this, along with urbanization and modernization between 1830 and 1930, formed the backdrop of the Great Depression. Agricultural inefficiency, a stock market bubble, the stirrings of globalization were its start; protectionist economics several years of hot, dry weather kept it going. Times were hard.

Franklin D. Roosevelt came into power in 1932, and to spur the economy took Hoover's use of government programs to a new level. But in responding to poor working conditions, and the populist economics of the time, Roosevelt and his Northern trade unions wanted a national minimum wage, as a way to levy a tariff on goods from the South:

During the 1920s and 30s, the American textile industry had begun to shift from New England to the South, where the cost of living was lower and where Southern workers produced a high quality product for lower wages. Politicians in Massachusetts, led by Senator Henry Cabot Lodge, Jr. and House leader Joseph Martin, battled in Congress for a law that would force Southern textile mills to raise wages and thereby lose their competitive edge.

Sometime between the passage of the Fair Labor Standards Act of 1938 and LBJ's Great Society, the idea of Liberality morphed into something else entirely, losing the prospect of shame, both for the denial of necessary assistance and acceptance of unneeded aid. Caused perhaps by an internally contradictory picture of human nature, or with the cancerous assistance of Marx and Engels, Liberality came not to mean trusting men to do right when treated rightly, but forcing men to give out of assumption of their wicked illiberality.

Modern "liberal" rhetoric is that fulfilment requires economic equality, which is to say equality of outcome rather than of opportunity. Noting quite rightly that it is easier to become wealthy when one is economically well off, they reason that opportunity is not equal unless means are equal. They then use that corruption to assert that equality must start with taking the "excess" from one to supply the "needs" of the other, with both excess and need redefined as circumstances dictate. If, or rather since, the process of enforced equalization fails to make men equal, rather than question the assumption that it can or even should work, they discover new ways in which men's means differ and demand that they must not.

It's right there in the Constitution, isn't it? Life, Liberty, and Equal Property. Wait, that's not quite it. "Pursuit of Property". Same thing, right?

No. Humans are satisfied only with what they somehow have earned. To paraphrase Pascal, a man will spend an afternoon in the woods chasing something that he would not accept as a gift. An athlete will train for years in pursuit of a medal he would not purchase. The overcoming of life's obstacles, like the pursuit of a clever prey, is the thing; the earning of the prize, and not the prize itself, is the victory.

It is difficult to see, then, how earning a living is less important than earning a prize. There is a striking difference in outlook between someone who just barely makes a living at work, and someone else who subsists through government largess. That difference is the key to understanding why the Pursuit of Property, and not the Property itself nor some other Pursuit, was given precious ink in our Constitution.

So while the government deeded to homesteaders vast areas of land so recently purchased from the indigenous inhabitants with the blood of soldiers, the land itself was not the prize. It was worth very little without improvement, but with risk, time, and work it could be improved, if only with a shack in which to live, and a bale to feed that mule.

Now comes the government to say that employers are not paying their workers enough. The minimum wage will be set higher than the employers were otherwise willing to pay. But they still will need workers, so with a combination of layoffs, price increases, taking less profit, and cost-cutting, employers will adjust. But one thing they will probably not do is to pay any more than the minimum. Until inflation eases the pain of the current minimum (and incidentally erases the gain for the workers in this tail-chasing game), the Minimum Wage will be the Maximum Wage many can expect to get.

The process reinforces the notion that low-skilled workers can only achieve a higher wage by government fiat. Not only will employers not be able to afford to give raises, but politicians will be taking credit for giving raises without regard to merit. Everyone gets a raise, whether they can keep a mule employed or not; since everyone is chasing the hare, we must give them all a rabbit. Giving people what they have not earned has not worked yet, so we must do it some more.

And the burnt fool's bandaged fingers go wobbling back to the fire.

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