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A contrarian view of income inequality.

September 5, 2016

Income inequality is a campaign buzz phrase this year. It drives the  narrative about raising the minimum wage to $15, as well as the politics of economic class envy.

But if income inequality is caused by some people making more than others, why is it necessary to raise wages to cure it?

Why not LOWER wages?

Before you choke on your bagel and latte’ consider this.

Raising the minimum wage has always had the reverse effect that it purports to achieve.

After an initial bump in spending as the newly “equal” spend on everything from a more reliable car to fashion-forward clothes, everything simply costs more, and the amount needed to live at least a lower middle-class life goes back up again, usually before the incremental increase in wages even becomes fully implemented.

Thus in 2027 or before, there will be a call to raise the wage to $17.50.  In 2037, it will be $20.

That’s the way it has worked since the first time a minimum wage became law.

The routine annual dentist visit that cost $35 in 1955 is now several hundred dollars. The cup of coffee that was 15 cents in 1965 is $2.75 now. The decent 3 bed-2 bath home that was $20,000 in 1960 is now hovering at 10 times that figure.

Still, there is no doubt that there is a great disparity in earnings among the working class.

So let’s fix it another way.

Instead of a minimum wage hike, let’s have a maximum wage cut.

Everybody makes $15.00 an hour, and no benefits.

Doctors, lawyers, grocery baggers, burger flippers, computer nerds, cops, firefighters, reporters, campaign managers, presidents of anything, black, white, yellow, red or brown.

You make $15/hr., pay all your own bills and that is that.

I absolutely guarantee you that cars will no longer cost as much as an upscale home did in 1938, when the minimum wage became law at 25 cents an hour.  Rent will be 10 cents a square foot, and pavement that can’t seem to last more than one winter season will return to gravel roads. Your doctor gets what you can afford to pay, and no more.

Manmade pollution will drop by 90%, since those gravel roads aren’t very vehicle friendly. There could be a run on horses and old-fashioned tennis shoes and boots though.

That equality that everyone says they want will get very equal indeed.

We have living laboratories for how that works. They are called Cuba, or the old USSR or China or North Korea.

Of course that isn’t going to be much of a vote-getter, but aren’t elections all about who is the best person, not how much money they can deliver to targeted voter groups?

Yeah.  Right. Best for who and at doing what?

From → op-ed

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