Minimum and Maximum Wage

“Women’s strength is their facade of weakness, and men’s weakness is their facade of strength.” Warren Farrell

Since Congress is debating raising the minimum wage, maybe they should also consider a maximum wage. Why not? If the government has the power to set a minimum wage, surely they have the power to set a maximum wage.

What should be the maximum wage for a CEO, attorney, doctor, actor, professional ball player, airline pilot, or news anchor Katie Kuric? If the high wages of a ball player were set at a maximum the price of a ticket could be lowered and more poor people could afford to take their children to a ball game. The same with movies. Reduce the maximum income of actors and more families could afford to take their children to the movie theaters. The result of a maximum wage would see more customers at theaters and ball parks.

You either love big government or not. You do not get to pick and choose which parts you like. Citizens often say they agree in principle that government should not fund this or that, but if they like the arts, they will make an exception to their principle and allow the government to fund the arts. Some other citizens will make an exception to their principles. Soon there are enough exceptions to principles of limited government that there are no limits, and no principles. If the government can set a minimum wage, it certainly can set a maximum wage.

Of course Congress would never consider maximizing salaries. They love large incomes. It means more TAXES! Politicians love the inequality in pay because it gives them another reason to manage our lives. The politicians can talk the compassion talk and play Robin Hood as the people cry to Congress, "Mommy, Mommy, the CEOs have more than I have". Congress will confiscate money from the rich and give to the poor. Shareholders will "depend" on Congress to solve the pay problem. Instead, shareholders should just refuse to buy the stocks of companies that overpay their CEOs.

I agree the CEO pay is immoral. Too many board members are executives of other companies. Actors are in more of a free market than CEOs. Attorneys and Doctors are in a club that restrict members by licensing, and they are heavily regulated by the government, which means they are not operating in a free market.

The Congress wants to raise the minimum wage not out of compassion, but because lobbyist want them to raise the wage. Wal-Mart, a big business, pays more than the minimum wage, but they are lobbying for the minimum wage to be raised for two reasons; it hurts any small retail competitor who might pay the minimum wage, and it allows the poor to have a few more dollars to spend at Wal-Mart. Wal-Mart scores a public relations coup by advocating for a higher minimum wage.

Congress is lobbied by the trade unions to raise the minimum wage so it will make pay raises easier for union members, which will help the unions collect higher union dues.

Congress and State legislatures want the minimum wage raised so they can collect more taxes. Each time a poor person buys a one dollar lottery ticket in California, as much as forty five cents of that dollar will likely end up as State and Federal taxes. Each time a poor person buys a pack of cigarettes in California, she pays more in sales tax than the cost of the pack of cigarettes. When a poor person in California buys liquor with the increase in their minimum wage they pay an excise tax and a sales tax. http://www.taxadmin.org/fta/rate/liquor.html

When the government raises the minimum wage the consumer is hurt, but the big beneficiary is the government. If the government has a maximum wage the consumers benefit, but the government is hurt by revenue reductions. Which do you think the government will impose?

Bilbo Baggins