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View Diary: Michele Bachmann wants to eliminate the minimum wage (139 comments)

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  •  1. She's Not Alone 2. Smith & Ford Disagree. (0+ / 0-)

    1.  All the comments here characterizing this statement as one so extreme as to be evidence of ignorance or insanity should reflect on the fact that Michele is not alone in thinking this way.

    While difficult for individual workers, lower wages can make U.S. industries and companies overall more competitive and allow employers to hire more workers than they would otherwise. In the long run, that may make the nation more prosperous.

    There were also conservative pundits singing of this same page of the Republican hymnal during the debate on the extension of unemployment.  Some wag made the argument that more unemployed without benefits is a good thing because it puts downward pressure on wages, which (he magically divined) creates jobs.

    Given the lack of rational already embedded in this line of "reasoning", it would seem just as likely that the inverse relationship would extend into infinity (and beyond.)  So every drop in wages would lead to a proportionate increase in jobs.

    Everywhere you hear or see this discussion there is one essential segment of the economic system that is left out, ignored, or imagined to exist by means of magic fairy dust - consumer earnings affect consumer demand without which there is no need for more 'jobs'.  

    This basic element of a free market economy is ignored in word and deed by the Not-Job-Creators whose supposed tax-related uncertainty keeps them from investing the billions currently sitting on the sideline.

    Two fairly authoritative sources would agree with us and disagree with Rep. Bachmann:  

    "Is this improvement in the circumstances of the lower ranks of the people to be regarded as an advantage or as an inconveniency to the society? . . . It is but equity . . . that they who feed, cloath and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, cloathed and lodged."

    Adam Smith, The Wealth of Nations
    "An underpaid man is a customer reduced in purchasing power. He cannot buy. Business depression is caused by weakened purchasing power. Purchasing power is weakened by uncertainty or insufficiency of income. The cure of business depression is through purchasing power, and the source of purchasing power is wages."

    Henry Ford *

    (*Stipulated to be no friend of unions and anything but soft-hearted towards his workers - all the more powerful that he understood for his own selfish interests that paying his workers a better wage would work its way back around to his own benefit.)

    We'd rather dream the American Dream than fight to live it or to give it to our kids. What a shame. What an awful, awful shame.

    by Into The Woods on Tue Jun 28, 2011 at 05:01:07 PM PDT

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