Re: Minimum wage column (Invert economic pyramid, June 22, Advocate) by Greg Neiman:
While it was interesting to peruse Greg Neiman’s passionate defence of his beloved NDP’s deeply-flawed plan to increase Alberta’s minimum wage by half in the span of a few years, it was profoundly disappointing to note that the esteemed writer is so ideologically blinded that he can’t get beyond trotting out the usual left-wing tropes.
Where to start? How about looking a little deeper into the how and why that has resulted in years of flatlined take-home pay for millions of North American workers. Neiman conveniently failed to address the fact that increased government debts and or taxation over the last several decades have managed to erase the massive productivity gains created by both business and labour in the post-Second World War period, and instead blames “big business.”
No mention is made of how massive governmental intrusions into how virtually any product gets made, or how it performs in the marketplace, or even how a service is delivered has completely erased the ability of the free market to build anything cheaper, faster or better.
For example, 25 to 30 per cent of the price of any new vehicle purchased goes towards the cost of emissions, safety and fuel economy regulations that have been put in place just since 1995, not to mention past and future regulatory hurdles.
It’s worth noting that the current Obama administration added 2,185 new regulations to everything from the workplace to marketplace in 2013 alone, with projections towards at least 18,000 new regulations against the American people during his presidential term. Many of those regulations will be aped by Canadian federal or provincial governments. Each has a cost, and that cost is only borne by those who are employed in the private sector, and the cost of meeting those regulations is often job and income losses.
Does Neiman assume that there is no economic cost for the fact that there is a literal raft of regulations concerning the sizes of canned food containers allowed on the Canadian market? If so, I would love to have him make a cogent case as to why it’s illegal to sell honey in an 800-gram container, and why my life is better because of it. Better yet, why should I be forced at gunpoint to pay a federal employee to enforce such regulations?
While he’s at it, why am I forced, again at gunpoint, to pay provincial employees to intrude on places of lawful commerce and harangue the employees on the evils of running with scissors? I’m sure McDonald’s is hiring, and the work would be more meaningful to the people these regulators would encounter.
The point is that the list of meaningless and unnecessary government agencies draining the pockets of the workforce is longer than a Russian novel.
Neiman also fails to delve into how structural government debt and unchecked taxation is the single biggest pressure point holding private sector incomes down. Everything has a market value and the price of government is not immune to that. If it were, there would be no public debts and budgets would always balance. Unfortunately, despite the fact that governments can confiscate at will, and send armed men to deprive the recalcitrant of their liberty and property, there is an increasing inability of the taxpaying public to conform to the wishes of the tax spenders.
Thus, ever more Byzantine tax schemes require ever more acrobatic explanations as to why they fail to achieve the revenue goals of those who wish to feed at the public trough. Instead, the taxes are increasingly deferred until such point as the tax spender of the day has collected his or her bag of gold and ridden off to an Arizona sunset.
Nor did Neiman mention how, in spite of his admiration for socialism, the path to wealth is increasingly paved with socialist bricks. The kinds of wealth that Neiman et al disparages are increasingly reserved for administrators of socialist enterprises (I’m looking at you, Red Deer College).
Lastly, let’s do the math on minimum wage and a typical, big name fast-food franchise. One, in particular, requires at least $250,000 in unencumbered cash just to buy in. The turn-key operation runs to over $1 million, and employs 16 staff. Annual sales run to roughly $3 million. If those staff are paid minimum wage, and that wage increases by 50 per cent, that’s $160,000 per year that will come right out of the bottom line, and the pocket, of the franchisee. What it really means is that the average franchisee, having invested $250,000, plus assumed another $750,000 and more in risk, will have to work for less than what he pays his employees. I’m sure that will work.
Sorry Greg Neiman, but your socialist sympathies are getting increasingly in the way of rational thought.