Message from the Executive Director: The Wages of Min

Message from the Executive Director: The Wages of Min

May 01, 1996

Is the "Revolution" over? Did it ever really begin?

What brings these questions to mind is not the revolutionaries' failure to curtail Medicare, kill the Commerce Department, or reform risk regulation. Rather, my perplexity stems from the Republicans' preemptive cringing and Me-Tooism over the minimum wage.

Ever since Bill Clinton refused to be cowed by government shutdowns into signing the GOP's budget proposals, Republicans have been in a self-described "funk" -- a Carter-like malaise. This suggests the revolutionaries never quite understood their mission. They thought their job was to govern, i.e., enact major reforms. But when the other team controls the White House, governing from Congress is possible only with veto-proof majorities in both chambers -- assets the revolutionaries do not possess.

The revolutionaries' single-minded objective, therefore, should be to complete the overthrow of the old order, using their ability to set the agenda and frame the issues to destroy the moral legitimacy of the statist quo. Then and only then will the revolution party be strong enough to govern. Many more tutorial hearings will be needed to expose the wastefulness, unfairness, and destructiveness of the Welfare Regulatory State.

Ceding the moral high ground to Bill Clinton and Ted Kennedy in the minimum wage debate is dangerous, because the minimum wage exemplifies just about every collectivist fallacy ever invented. The minimum wage is based on the insane premise that government can create wealth by legislative fiat. It is based on the dishonest premise that government can selectively help some people without harming others. It is based on the arrogant premise that central planners know better than willing buyers and sellers in the marketplace what rates of exchange are reasonable and fair.

All collectivist delusions are rooted in the denial of the teachings of economics. Marx could preach redemption through socialism only by denigrating economics as "bourgeois ideology." Similarly, minimum wage advocates deny that government-mandated increases in the price of labor reduce the demand for labor. This can be true only if economics is false.

Who profits from this disinformation campaign? Union bosses, to be sure; minimum wage laws protect unions from lower-priced competition. But there's more to it than that. A people that cherishes minimum wage laws will be too economically befuddled to see through more sophisticated assaults on their liberties. They'll never be fully persuaded that welfare creates poverty, that taxes destroy jobs, or that mandated benefits damage health care.

The era of big government is not over. Many Americans still believe government can and should play Santa Claus. This sentiment can be changed, but only if the revolutionaries fight to change it.

Herewith a few suggestions: Call the minimum wage proposals by their proper names -- the "Teenage Unemployment Act," the "Welfare Expansion Act," the "Break the Bottom Rungs of the Economic Ladder Act." Ridicule is a mighty weapon; don't be afraid to use it.

Hold hearings to unmask the true causes of wage stagnation (high taxes and over-regulation) and unemployment (minimum wage laws and other government-manufactured barriers to entry). Bring forward inner-city small business owners who can explain from their own experience how federal labor policies harm the poorest of the poor.

Champion a positive alternative like Senator John Ashcroft's proposal to let workers deduct from their income taxes the employee share of Social Security Taxes.

These steps won't guarantee victory, but losing the vote on minimum wage wouldn't be the end of the world. The immediate legislative contest is less important than the larger battle for public opinion. If the revolutionaries lose their will to fight that battle, then the revolution is surely dead.

--Marlo Lewis