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article imageOp-Ed: Why do unions, big businesses, governments hate the poor so much?

By Andrew Moran     Mar 28, 2013 in Politics
Washington - Since elementary school, students are bombarded with endless propaganda that unions and governments are the purveyors of justice when it comes to the impecunious of our society.
But the actions of these entities lead to the question: why do they hate the poor so much?
Firstly, let’s concur that only two or three percent of the entire workforce in the United States gets paid the minimum wage, presently $7.25 an hour. Most of these workers fall into these categories: aged 16 to 24, live with their parents and single. A very small minority of minimum wage workers are supporting themselves and at least one other person.
During President Barack Obama’s State of the Union Address, he alluded to increasing the minimum wage to $9 per hour. Although many are calling for a higher minimum wage then just $9, the proposal has garnered the support from members of the Democratic Party, Keynesian economists, anti-poverty groups, unions and big businesses, like Costco.
Indeed, akin to any other piece of legislation that has been passed and ideas that generated support in the name of helping impoverished households, the minimum wage has led to tremendous unintended consequences. The minimum wage law in itself is one of the most anti-poor measures because it hurts the uneducated, the unskilled, minorities, youth and immigrants from getting a job.
Of course, the minimum wage is always at zero because this is what happens when government mandates a set fixed wage. Why is it at zero? Because either workers cannot find jobs or they lose their own jobs because of the ramifications of a heinous policy.
Minimum wage laws are designed to force employers to discriminate against those who lack the proper skills, training, experience and education. If a company is forced to pay a certain wage then they want the best workers available. However, this piece isn’t about how dangerous minimum wage measures are, but rather why they are supported by unions, governments and big businesses.
Unions
Unions are a violent, fierce and rude group – just take a look at the recent demonstrations in Wisconsin and Ohio. Even studying the history of the unions, such as the 1892 strike against the Carnegie Steel Company, shows that all it understands are the words intimidation and coercion.
When those who claim that greed by capitalists has created income or wealth inequality (it seems even protesters, statisticians and politicians can’t distinguish the difference), and extreme levels of poverty, they should be looking at unions. Of course, on the surface, one might come to the conclusion that unions help the poor, but they certainly do not.
Labor unions, whose employees earn far beyond the minimum wage, are in full support of minimum wage hikes because each increase helps them stay employed. Experienced unionized workers are always in direct competition with non-unionized inexperienced individuals. Therefore, the higher the minimum wage is set, the likelihood of the unskilled laborers getting jobs decreases.
As time goes on and the higher the minimum wage goes, it hurts both the people on the outside looking in and the people on the inside looking out. The only ones who truly benefit from a minimum wage are unions and big businesses (we’ll get to that soon).
Famed economist Thomas Sowell wrote in an essay of his, “Just as businesses seek to have government impose tariffs on imported goods that compete with their products, so labor unions use minimum wage laws as tariffs to force up the price of non-union labor that competes with their members for jobs.”
As the unemployed languish, the unions flourish.
Big Businesses
Once again, corporations are viewed as establishments that want their workforce to earn $0.01 per hour and to work 12 hours a day – even before unions most employees had eight-hour days. However, what should be understood is that large corporations, like Costco, Target, Walmart and others, directly benefit from minimum wage hikes.
This may seem contradictory to what we have all been taught and told by our esteemed elected officials, the mainstream media, the anointed intellectuals and anti-poverty leaders. But it would make sense for a big company to urge the federal and state governments to employ minimum wage hikes because it hurts their competitors.
Similar to the tremendous amount of regulations (latest estimate was 40,000 to 50,000 pages of burdensome regulations) and anti-trust legislation, where corporations can afford to abide by them, corporations can afford to pay the minimum wage. But small businesses cannot.
What better way to kill your competition then to appear to be promoting the goodwill of the poor while small- and medium-sized businesses are forced, yet again, to deal with a cost that they have to bear the brunt and cannot afford to handle.
Governments
Government: the epitome and symbol of incompetence, failure and wasteful. For some reason or another, the general public views government as the crusader of equality and fairness, while the system of capitalism and free markets is the bringer of misery and suffering (how’s the computer, designed by capitalists, you’re on right now?)
I reported on how Massachusetts Democratic Senator Elizabeth Warren suggested that the minimum wage should actually be $22. One question I would like to ask Senator Warren, who also said that an economy succeeds through government regulation: why do you want to create even more poverty and unemployment in a tough economy?
With all of the evidence to suggest that minimum wage laws do opposite what they were intended to do, why does government still advocate for a failed measure? It’s difficult to provide a satisfying answer, but it’s safe to respond with this: why does government spend money on video game museums (fail)? Why does government pay farmers not to farm their own land (fail)? Why does government like to initiate wars (fail)?
Because it can.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
More about Minimum wage, Unions, big businesses, Governments, austrian economics
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