I had fun discussing political and social issues with the only person at the Sports Page who voted for Kerry, or more accurately, voted against Bush. He cited his concern about the reductions of personal liberties, to which he has a point in some regards. This was not something I broached; instead, the fellow trivia buff came to me and said, “you seem like an informed person, what do you think about…”

Later in the discussion, when I found out he was an accountant, I asked him what he thought about the effect of the minimum wage on the economy. He agreed with my points that the minimum wage indeed raises prices, limits employment, and reduces economic activity, but he was still for it because it is a protection of people from a business’s ability to reduce prices and take advantage of the situation. Pity he had to run afterwards; I would have finished with further arguments:

There is no question whether, if the minimum wage were abolished, businesses would try to pay people less. This is only one driving force in the matter though. If businesses can reduce their labor costs, they can hire more people and improve their business. People can still demand and justify higher wages, especially if they can show their role in the improved business. There will be a new “minimum wage”, but it will be the wage where labor supply and demand intersect. More importantly, this new minimum wage will float up and down, in response to immediate economic conditions. Have you ever seen a government minimum wage decreased?

This brings me to my second point. The minimum wage today is a single arbitrary standard set by 535 people for the entire U.S. population. It does not flex for economic conditions, nor for location, except for which state law has a higher minimum wage than the federal wage. This attempt at state correction does not account for the wide variety of economics within a single state; a dollar in Kilgore, TX, goes a lot farther than in Houston. Furthermore, no amount of state correction is able to dictate the price point where someone can negotiate a higher wage or get paid less for lesser quality work.

The minimum wage also artificially equalizes the value of different types of work. Sacking groceries at the supermarket is now equal to sweeping floors at the restaurant and stocking shelves at Wal-Mart. If someone were entering the job market, would they be willing to work slightly less for sweeping the floors, a less physically demanding job than stocking shelves? With the minimum wage unloaded, a person could make that choice, because restaurants could higher more sweepers. As a customer I tend to eat at restaurants that are cleaner.

In a policy piece by the Economic Policy Institute — I make no characterization as to their ideological bend — the EPI argues:

Everyone should have the opportunity to earn a decent wage. No American should be compelled to work at a rate that, assuming full-time labor, every weekday, all year long, amounts to the $10,712 that the current minimum wage provides. This is equally as true for a middle-class youth working to raise money for college as it is for a single mother supporting a family. The minimum wage is not just about helping the impoverished. It is about fairness, the value of work, and the opportunities that work provides.

I find the phrase “decent wage” equivocal and potentially elitist. Who decides what is a decent wage? If I am allowed to choose my employment (which happens to be the case for every U.S. citizen outside of a correctional facility), then I should be the one to decide and negotiate that decent wage. Is someone else better able to decide that decent wage than I am? The second sentence is equally elitist, in that someone else decides what is good enough, and it speciously suggests that someone is forced to work at the current $5.15.

It seems to me at one time (1996) that $5.15 was good enough for our legislators. Why has 65 years of increasing the minimum wage not fixed this problem that we have defined for ourselves, that people are poor? Why wasn’t the $7.00 as proposed by the “Fair Minimum Wage Act of 2004″ good enough in 1996? We seem to be perpetuating a cycle of elevating our costs, then elevating our prices, then elevating our costs again to be able to afford the new prices. It has become a political strategy to suggest that big business holds a monopoly on labor demand and therefore colludes to reduce “the opportunities that work provides.” This strategy is in play to scare low-income employees into voting for someone with an immediately sweet answer that sours later on. One only needs to look at champions of hard work, such as Alex Spanos, who turned a sandwich business into a real estate empire, to blow this strategy out of the water.