Tuesday, 12 February 2013

Wishing for a “living wage”

Unions are calling for a “living wage” for everyone of at least $19 per hour, enforced by government on every employer. People “need” this they say, therefore they should have it.

This idiocy is not primarily economic—although economist Matt Nolan does give it a thorough spanking, pointing out that “by imposing a ‘price floor’ you are ensuring there are a group of people who can’t get jobs and will get hurt—but unions don’t care because they don’t represent the unemployed.”

See, it is idiotic. But the idiocy is not primarily economic; the idiocy is primarily philosophic. You see, these people are utterly blind to causality. They see no connection at all between how much a person can produce and how much they are able to consume: as if wishing for a loaf of bread were enough on its own to bring that bread on your plate. They se no causal chain connecting what is produced and what is consumed: as if the two were separate things going on with no reference to each other. They see no causal link at all between between production and consumption: as if need itself is sufficient to set the wheels of production in motion.

Yet not an ocean of tears nor a plane-load of hand-wringing former Hobbit actors can bring into existence the bread you will need tomorrow—not unless those hand-wringers are able to put those hands into productive ends.

Taken seriously, the call for this “living wage” is nothing but a whim—that is, “a desire experienced by a person who does not know and does not care to discover its cause.”

The thing these people need to learn is that wishing doesn’t make it so. Reality just isn’t made that way.


  1. It took me a while to figure out how the "living wage" is an example of the Broken Window fallacy, but it is.

  2. Oh come on, PC, all money comes from the government anyway, so why stop at $19/hour? I think every worker and beneficiary should be paid $1000/hour. How to fund it? Well, that is simple - Paul Krugman reckons we can all just mint $1 trillion coins tp pay for everything - and he won a Nobel Economics Prize so he must be right. You really do need to get with the programme.

  3. You're arguing second order effects (increasing the minimum wage increases unemployment).

    Hell in a communist country like NZ, unemployment si far, far too low, so frankly there's at least as strong an argument for increasing the minimum wage as there is for decreasing it or abolishing it altogether.

    Philosophically there is a single fact underlying all this: it is the employers money so they must get to decided who to give it to, on what terms, whether work is good enough, when someone should be fired - with no tribunal, court, inspector or union getting in the way.

    It is after all their money and their risk.

    The whole idea of an employee's "rights" to anything at all are completely rubbish: its the employers money - employers have the rights! Any dereliction of duty, any work or conspiracy to impede an employer's business should be a civil and a criminal offense.

    The who point of capitalism is that capital rules. Bludgers/ Workers / Employers should just thank their lucky stars every minute of every day that someone who actually has some personal worth, personal value, personal respectability is willing to risk all that by giving them some money out of the kindness of their heart.

  4. Anon’s attempt at a clever parody betray not only a detachment from reality (as per PC), but also a pessimistic and sad outlook on human potential.

    To Anon there can be no equal rights of employer and employee. In his world it’s a given that you’re either an employer or an employee, almost like medieval times when you were born either a noble or a serf, and once born into that class you have no ability to change it. Forget about trying to make your work more valuable (and demanding more pay on that basis), your only hope for improvement is that the gov’t forces your employer to pay you more than you’re worth. In other words, become a parasite. What an insult to those he imagines he defends.

    In my first job as an inexperienced and naive 18 year old I was earning less than this “living wage”, after adjusting for inflation. I’m now self employed and earning at least 5 times the “living wage”. What allowed this to change? Simply put, it was by working hard and slowly and gradually acquiring the skills and experience I needed to demand more – so that what I was paid by others matched (or was less than) the service and value I could offer them. If I’d chosen instead to parade myself in front of the Herald complaining how hard life was, I’d probably still be in that position.


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