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Incentivizing economic freedom the right way

May 19, 2014

The Swiss people get it. On Sunday, Swiss voters rejected  by 3 to 1 the plan to make Switzerland’s minimum wage the highest in the world at around $24.70 an hour( when converted to U.S. dollars). They seem to understand that if you make labor too expensive, the people you want to help become the people you have to help. In fact in recent times, the Swiss have started pushing back against government control of the economy.

The Swiss economic landscape bears some eerily similar resemblances to the United States. Switzerland is considered to have some of the world’s most expensive cities to live in and very high prices. The median wage is just above $37.00(USD) an hour. However, like the U.S. it also has a rural and lower-skilled population that certainly doesn’t earn anything close to that figure. Switzerland also has a vocal union segment, and they, like their U.S. counterparts, pushed hard to have the legislation approved.

The neat thing about Switzerland is that the people got to vote on the minimum wage issue. Here, the White House just issues an edict in the form of an executive order.

Issues that affect an entire country should be open to considerably more public input and control. At best, the most that our citizens can do at present is to call or write their elected representatives. Since the people aren’t the ones pulling the strings on our elected representatives, that’s about as productive as spitting into gale force winds.

Take the ACA. The ACA had opposition from the get-go. Prior to the single-party passage of the ACA, there were a lot of people that didn’t think the Feds were capable of managing the entire country’s healthcare. Many of them had first-hand reasons to distrust the administrative proficiency of other government-run healthcare models.

Anyone with experience at any level dealing with the Veteran’s Administration healthcare system or Medicare and Medicaid knew that there are simply too many layers of bureaucracy, if not outright incompetence, between patient and healthcare. The current flap at the VA over the obvious rationing and denial of care to achieve personal gains for the administrative staff shows just how far wrong those systems can go.

The United States was not founded on the idea that one person should call all the shots. Somehow, whether through lack of understanding, greed, or just plain apathy our citizens have allowed our country to become a de facto oligarchy.

So it is with the minimum wage debate. There is no debate about how to get ahead in life. The debate is only about the mechanism.

The greatest incentive to acquiring more wealth isn’t by getting paid more to learn nothing and do less. It’s strictly economic. Learn more, do more, get paid more.

The kid that starts out in a minimum wage job usually is smart enough to see that low wages won’t pay for a nifty sports car or designer clothes. They start looking for a way to earn more, and stumble onto the idea that they have to know more.

Maybe that translates into taking employer-sponsored in-house training, or maybe it leads them to some sort of higher education, either technical or even an advanced degree. And voilà , they make more money.

Instead, we have an administration  that creates plans and policies that result in rationing the availability of work. Then it tries to cover up the effects by pushing for a higher minimum wage. It’s pretty hard to afford a nice car on 29 hours a week at any salary. If there are fewer jobs and they result in less take-home pay due to restricted hours, then restoring the previous minimum income by increasing the hourly rate isn’t exactly a step forward.

The Swiss got that. Too bad the White House doesn’t. Even more disturbing is that we can’t make them get it, at least not the way we are doing it now. 

We can’t vote on the minimum wage.  We can vote for people who might let us do so in the future.

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