As it turns out, Milton Friedman and I agree about at least one thing: economic problems occur when you f*** around with the monetary supply (layman’s terms, of course). As for that pesky hyper-inflation thing, just stop printing money already. Honestly, some governments are just like children: “What do you mean, money doesn’t grow on trees?”
In the news today: Ontario’s minimum wage rises to $8.75 per hour. This is great news for the people who are working for the minimum and manage to keep their jobs (but let’s hope that their health benefits and training allotments aren’t reduced); stimulating news for discouraged workers who may now decide to enter the labour force (as the supply of labour increases); and definitely not so great news for those who will become unemployed as the demand for labour decreases.
Specifically, won’t this wage increase spur growth in the population of “idle teenagers”? Heavens… we can’t have that. Maybe it’s good news for the federal government: finally a way to be rid of all those controversial EI surpluses! But definitely bad for society as a whole due to upward pressure on the price level, more incentive for people to drop out of school and look for work, more actual unemployment, and more barriers to entry for start-up firms due to higher factor costs (less market competition).
Is THIS the way to combat poverty? Sure, the wage floor strategy wins the average vote… because, arguably, the average voter doesn’t know or care about economics. Intuitively, you’d think: “I want a higher wage for what I do because then I could afford to pay rent and feed my family”. It’s hard not to find that idea appealing; it’s hard to realize that it’s just a cycle of pain for the working poor.
There’s just something about free-wheeling political glitz destined to capitalize on the ignorance of voters that is shameless and repulsive…
With Democracy as with Capitalism: it’s not a great system, but it’s the best we’ve got.
