Business owners know when a product is not selling, regardless of whether it’s apples or automobiles, they must lower the price.
Sometimes they’re forced to cut it severely and take a loss. Most reasonable people would contend that it’s a right of the owner to sell his product at whatever level the owner determines is in his best interest.
When the federal government steps in and fixes prices above the market, the products don’t sell and an oversupply is created. We currently have an overabundance of a product known as labor, especially among teenagers.
The overall unemployment rate for this group is 19.3 percent. In spite of this large surplus, politicians are pushing to increase the hourly rate 39 percent to $10.10, making these youngsters even more unaffordable.
It is routine for the self-employed to work grueling hours for little or no pay. Also consider the unpaid intern who gladly trades low, or no wages, for the experience in a profession the intern deems to have upside potential.
Both groups elect to sacrifice the price of their labor for the potential of future, higher payoffs. There is no government entity protecting the entrepreneur or the intern from trading his labor for the prospect of a brighter future.
Our universities charge teenagers tens of thousands of dollars to supposedly train them to enter the working world. Students pay vast sums, and incur massive debts for this privilege and the chance at better opportunities, much like the entrepreneur.
It seems contradictory that the University of Missouri can charge youngsters $22,000 annually for tuition, room and board, yet it’s not OK for that same teenager to voluntarily sell his labor at a cost he and his employer deem fair.
Contrast this with a Kansas City youth lowering his hourly wage to $5. After a year, he’d have $4,680 less than he may have received, assuming he could have secured a job at the higher $7.25 government wage.
He’d also have a year’s worth of actual job training, experience and a track record to build upon. A year later at the university, and he’d have $22,000 in debt, three more years ahead and an additional $66,000 to borrow.
The minimum wage is not only an affront to common sense, it should be considered a civil rights issue. Look no further than U.S. Bureau of Labor Statistics.
The black teen unemployment rate is 38 percent. Why not eliminate the minimum wage and see whether we can get the 38 percent who are unemployed working?
If this isn’t palatable, and if our leaders are actually sincere, why not eliminate taxes, including Social Security and Medicare, on both the employer and the low-wage workers?
This would reduce a 25.3 percent tax bite on each dollar earned.
If implemented, the net benefit to minimum wage employees, regardless of age, would be the equivalent of $8.35 an hour for the first $5,900, and $9.70 thereafter.
This is not nearly as good of a solution as killing the minimum wage but would be a positive step in helping the employer and the low-wage earner.