Good intentions sometimes lead to bad results, especially if an intention is bad at first. Pen | fun | pavilion www. ｂｉｑｕｇｅ。 infoOnly by understanding the source of the real increase in income levels can we avoid self-defeating with good intentions.

The most direct way to practice the idea of increasing the income of working people through administrative intervention is to intervene in the legislation of wage levels, and the most common in the world is the "minimum wage law". Except for a few countries in the world such as Singapore, Switzerland, and Norway that do not have minimum wage regulations, most places have set minimum wage standards to a greater or lesser extent, and the standard line of this system is rising in many regions.

In the United States, for example, calls for a $15 hourly wage law have been raised, with New York and California announcing bills in the spring of 2016 to raise the minimum wage to $15 per hour by 2022. California Governor Jerry Brown held up the signed document and said solemnly: "Although the minimum wage law does not make sense in terms of economic efficiency, it is reasonable in every trace of social morality." ”

However, any honest and common-sense economist, even if otherwise incompatible, can point to the problem with Governor Brown's remark – unless you think it is "social morality" to put unskilled junior workers at risk of losing their jobs and sources of income.

The most basic relationship between supply and demand in the market has shown that, all else being equal, the increase in the price of a good or service will reduce the demand for that good or service (and increase the supply at the same time), and the change in the price of labor will have a corresponding effect without exception - if you don't believe me, you go to your boss and ask for a doubling of your salary, and then see if the boss's expression will react to your offer.

Essentially, the minimum wage sets a minimum price for labor, and as a result, employees with a level of productivity below this standard are more likely to be fired because they create less value to the company than the minimum wage that the company must legally pay. It may not be surprising that the company has not been able to lay off every employee whose original salary is below the new standard by reducing costs by streamlining employees, adjusting job responsibilities, and cutting company benefits, but the pressure of unemployment on the whole is unavoidable, and most of them are likely to have their salaries wiped out by unemployment - ironically, this is the kind of people that the minimum wage law is intended to "help" and hurt them, but it should not be surprising that the law was intended to hurt in the first place.

Economists such as Thomas Sowell and Walter Williams have compiled many materials from the early minimum wage laws, showing the naked discriminatory background of the minimum wage laws at that time. This kind of exclusion of alien races at the bottom of the hierarchy has been clearly captured and preserved because there was no political correctness that was too much so today's nearly a century ago.

For example, in the early 20th century, a Harvard professor (Arthur Holcombe) praised Australia's minimum wage laws: "Australia's minimum wage laws effectively protect the living standards of white Australians, so that they do not have to compete with people of color in the job market to a large extent, especially with Chinese." In 1925, in South Africa, where apartheid had not yet been fully implemented, the Economic and Wage Commission reported that "...... Although there is no law that directly excludes Indigenous people from employment, the same effect can be achieved by setting a minimum wage law, because Indigenous people (with universal skills) will be less likely to be employed if the minimum wage is set very high. In 1925, British Columbia, Canada, introduced a minimum wage law with a clear intention to drive Japanese immigrants out of the logging industry; in 1931, American politicians decided to curb the trend of colored labor to continuously reduce the competitiveness of white unions, and promulgated the first federal minimum wage law (Davis-Bacon Act), which set the minimum wage standard for federal public construction projects, and the key was to keep blacks out.

In addition to discriminating against foreigners, it is not uncommon for companies to use the law to gain an advantage for themselves. For example, in 1938, the United States introduced a comprehensive minimum wage law (Fair Labor Standards Act), and the main force in promoting this law came from the textile mills in the northeastern United States - these textile mills found themselves unable to compete with their southern counterparts, mainly because the southern textile mills had cheaper labor, but it was impossible to directly ban the southern textile mills, and they immediately had an idea: drag down the gang with the minimum wage law!

Wal-Mart and Costco have repeatedly advocated raising minimum wages, which pay employees at a higher minimum wage than they call for, but the new standards will force small and medium-sized malls that can only afford lower wages to raise their salaries, i.e., pass laws that increase the labor costs of small and medium-sized businesses to hurt their competitors, and eventually such small and medium-sized businesses may have to lay off employees or even close their doors。

Unions are also one of the main forces in pushing for minimum wage laws, but at least in the United States, unions have always protected the members of their own unions, and they are not merciless in harming unaffiliated workers or what they call "labor thieves" (many black histories, which will not be repeated here). Unions rely on minimum wages to eliminate a lot of external competition, but just recently, as California prepares to gradually raise the minimum wage to $15 an hour, some unions find that their members may also be affected by unemployment pressures, so several unions in Los Angeles have begun to apply to the government for "exemptions" from the minimum wage law, in other words, they want their members to be exempt from the forced wage increase to $15 by law, and it is good to maintain the status quo below $15 - This scene is both comical and reflects their full knowledge of the effect of this law.

Of course, many of today's proponents of minimum wage laws no longer hold overt discrimination against aliens, nor do they side with vested interests against small and medium-sized competitors, but the effect of harm to entry-level workers who lack skills and experience, regardless of their intentions, is the same. The minimum wage law is equivalent to removing the lowest steps of the job market, adding obstacles to the entry of many people who lack education and skills; Qualities such as working with others are not innate, and often need to be acquired, but the minimum wage law deprives them of this opportunity to accumulate at the bottom, and they cannot freely contract with the company, and they have no way to even support it at the beginning, so how can they climb up?

It is likely that some people, with the mercy of Our Lady, will say that anyone who works has the right to receive a reward sufficient to support the family. Regardless of this standard of "living", the fact is that many of the initially disadvantaged are young people who have not yet formed a family, and these entry-level jobs are not in themselves lifelong breadwinners. Moreover, as previously emphasized, a mandatory minimum wage will only cause them to lose a lot of opportunities, and will not make each of them magically increase their income.

It is clear that any well-intentioned justification of the minimum wage is untenable. Although we have only talked about the minimum wage law above, I believe that you will be able to draw inferences from the laws and regulations that interfere with wage income and have a deeper understanding.

As another example, social security is mandatory for individuals and businesses in many countries. Now suppose a very simplified scenario, your monthly nominal salary is 10,000, and you get 7,500 after the tax deduction is fully paid, and the enterprise needs to pay 4,000 for you according to the law, at this time, it seems that the 4,000 is the welfare that the state has won for you through the law; if there is no mandatory requirement, how can the enterprise pay an additional 4,000 for protection? It would be naïve to think so, because from the employer's point of view, only the cost of employment is 14,000, on the other hand, the average value you create per month is at least more than 14,000 (otherwise the employment relationship is a loss for the company). Suppose that the value you create by doing this work is 15,000 and the profit you make is 1,000 per month[Note i], will the company continue to pay you 10,000 nominal wages (5,000 profits) if the government suddenly abolishes the mandatory fees?

In a free and competitive labor market, no, because other companies will be happy to raise the price to poach you when they see a good profit: Company A will bid you 12,000, Company B will pay you 13,000, and Company C will pay you 14,000...... The freer the market, the closer your wages will be to the marginal value of your production - the labor and management sides in the market are equal, and the more enterprises, bosses, and capitalists, the stronger the bargaining power of employees. Therefore, the well-intentioned forced payment of fees for employees seems to be an intervention to obtain additional income security for workers, but in fact it only reduces the disposable income that workers receive, and those that are levied and cannot be used can be regarded as a harm to workers. [Note ii]

Many people have all sorts of illusions about income regulations, after all, because they do not understand why people's wage levels are rising, and some even think that the increase depends only on the generosity of the bosses - this is a very naïve view. So, filtering out the noise of inflation, where does the overall rise in people's real income levels come from?

This is the root cause of the increase in productivity, the increase in the level of production due to the investment of capital, the innovation of technology, the improvement of tools, the proficiency of personnel, and so on, making the goods more abundant and cheaper, and enabling people to have higher purchasing power with the same amount of money in their hands -- this is the root cause of the people becoming richer and the overall rise in the level of real income.

If the laws and regulations that intervene in income can really raise people's incomes and get rid of poverty, then if the poor countries of Africa are directly advised to raise the minimum wage and force local enterprises to pay all kinds of fees, the problems of poverty and livelihood security of the African people will be easily solved? If the minimum wage is directly raised to 1,000,000 per month, will everyone become a millionaire?

The prosperity of people and the increase of incomes are not driven by a single decree, but by the development of a free market and the economy. In fact, as long as it is in accordance with the ethics of freedom, that is, there is no fraud or coercion, the free contract between the employer and the worker must be a win-win situation, and with a starting point there are infinite possibilities for improving the situation in the future - the free party is the cornerstone of prosperity and the source of happiness.

The unhealthy notion that companies pay workers less than what they create creates is "exploitation" needs to be corrected urgently. You must know that only when there is profit can investment be attracted, and with investment, there will eventually be economic operation and development, etc., etc., and this is the only way to have employment.

For example, the United States' unfundedliabilities are measured in trillions of dollars, and even if they do not default and are successfully recovered, they may have already depreciated.