Monday, April 16, 2012

Economic safety net needed

There will always be people that have. And there will always be people that have not. That’s just a fact of life.

Even if you took all property in the world and divvied it up evenly amonst its 7 billion inhabitants, there would be people that would fritter theirs away and people that would end up with more. It’s human nature.

That said, everyone should at least have a chance at some form of equality. And there should be some level of fairness in the world. Unfortunately, humanity has proven time and again that left to its own devices, we are a selfish breed. 

Selfishness can be good. It inspires us to try harder, work harder, learn more, do more, build things. It could be said, actually, that selfishness makes the world go ‘round.

But at whose expense does that spinning occur?

Recently, friend and fellow columnist Bob Confer opined that the minimum wage should be abolished because it actually keeps the working man down. 

Bob said, “Over time, competition collectively creates higher wages because all employers must provide the average or best in order to be successful at the next level of the economic equation — the end product.”

The Libertarian in me wants to agree with Bob. The pragmatist in me, however, can simply see this is not the case. not historically. Not now. 

The free market does ebb and flow. There are times when it works out well for the common man. And there are times when the common man gets lost in the shuffle. During rough economic times, the working class will cannibalize itself simply to provide basic necessities for their families. We see that going on now.

While Fortune 500 executives argue to their boards of directors that they deserve multi-million dollar bonuses despite their companies’ declining profits, values and output, there is a class of people doing odd jobs to get by. Or treating their skilled professions as if they were odd jobs.

An entire generation of white-collar worker went to college to get degrees they can’t pay for off the wages they’re paid. Now you could say that it was simply a bad choice on their part. They should have all been investment bankers. But to quote Judge Smails, “The world needs ditch diggers, too.” We can’t all be investment bankers.

In the past few years, there have popped up a wide variety of websites which allow people to compete for freelance-type jobs. Many of them automatically give the job to the lowest bidder. These are skilled jobs being performed for pennies on the dollar. 

There are so many people scraping to get by that enough of them will do a $100 job for $20 just so they can buy groceries. In essense, the free-market value of things has been reduced to “how much do I absolutely need to survive this week?” No one will ever get ahead this way.

In a thriving economy, supply and demand will force salaries upward as (workforce) supply and (employment) demand is nearly equal. With the double-digit unemployment we’ve had for the past few years, potential workforce outnumbers employment greatly. And companies could — and (without minimum wage) would — pay next-to-nothing to employees. 

Bob contends that people would be making more if it weren’t for minimum wage. It seems apparent to me, however, that without the safety net of minimum wage, the haves would take advantage of the have-nots. 

As a civilized society, we need to ensure that doesn’t happen.