It is becoming increasingly apparent that the minimum wage is being groomed as a hot-button election year issue. Setting aside the destructiveness of minimum wage increases to job creation, the harm it does to the poor and unskilled, and the overall notion that the party which claims to be on the side of science and reason and in opposition to superstition and hokum ignores the scholarship on the subject, it is worth taking note of the disproportionately greater impact higher minimum wages (and mandatory health insurance policies, and regulatory burdens, and long lists of bureaucracies) have on small businesses vs large. The big guys can better handle the increased costs, meaning more and more small businesses will go away and be displaced by the big guys. It’s what happened to farms, to bookstores, to coffee shops, and to many other business classes, and while everyone laments the demise of mom-and-pop businesses that everyone trumpets as the engines of economic growth, there is an enormous disconnect between the philosophical support for small business and the practical and inordinate harm that big government inflicts on small business.
Now consider that this plays right into the form of corporatism we witness from this administration, corporatism that might be called economic fascism (large corporations in bed with and tightly regulated by the government). It’s much easier to regulate and impose your will on a few big companies than many small ones, and the big guys are far more likely to give your side big fat donations in exchange for favorable treatment in the regulatory trenches. Mom-and-pop shops, on the other hand, have no voice. They are few in number, they’re usually too busy working to be politically active, and they certainly aren’t a noticeable presence in lobbying. The symbiotic relationship between big business and big government can grow more easily and benefit both entities if the competition that small businesses is muted.
Watch-dog types often rail against predatory pricing practices that big companies might employ to drive small competitors out of business, yet don’t blink an eye at the similar effect and results that government burdens create. Unions, far more able to organize within, negotiate with and with and draw concessions from larger companies, are better off if mom-and-pops go away. Given how sympathetic our statists are to unions, and how unions work hard to deliver votes to those statists, it’s no stretch to include unions among those entities that support economic fascism. And, in the case of the minimum wage, higher-paying union members benefit from minimum wage increases in that those increases create upward pressure on union wages.
I generally don’t believe in hidden grand master schemes, much preferring the simpler explanation of Hanlon’s Razor and of knee-jerk populist policies, but idiotic ideas like minimum wage increases certainly play right into the notion that Obama, his minions and/or some string-pullers are steering the economy towards a new form of statism that remarkably resembles fascism. If minimum wage policy also creates a wedge issue in an election year, so much the better. If the job losses and displacements from higher minimum wages drive more low-skill people onto public assistance, well, we know which party tends to get those votes. And, if the opposition can be portrayed as being heartless and in the pockets of the big companies (oh, the irony), the statists might win some more elections and the march towards a fascist economy continues.
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