I am hard pressed to think of a law more pernicious than the minimum wage!

The agreement between an employer and an employee is a transaction, virtually like any other. The employee possesses talents that he/she brings to the marketplace. His/her customer—the purchaser of his/her offerings—is the employer. The employer will buy those talents at a price that when put to use nets it a margin above cost.

Employees enjoy the luxury of focusing their talents for an agreed upon number of hours each day. Their remuneration affords them lifestyles consistent with the value of their talents in the marketplace. Should they desire a richer lifestyle they must improve the quality, the value, of their offerings (their talents).

Here’s an analogy:

Chances are your neighborhood department store has a clearance section. That’s where the items that management determines offer the least value to the typical customer, and therefore garner the lowest prices, rest. Some folks enjoy sifting through the clearance aisles in hopes of finding an overlooked gem that might fulfill a want/need at an unusually low price.

My 19-year old son Ryan is a great kid and a real hard worker. Thing is, he has virtually no marketable work experience. So, his offerings are his ethic, his integrity, his arms, his legs and his stamina. The latter three are commonplace among teens. The ethic and integrity will only come forth after the fact, after he gets an opportunity to show his stuff to an employer. Ryan, before he got his current minimum wage-paying job, sat in the clearance aisle of the department store of available labor.

California is about to boost its minimum wage by 50%, from $10 to $15/hour. Essentially, the state is about to force its department store of labor to move all of the items, the Ryans, off of the clearance shelves and place them next to the merchandise that legitimately, to the eye, justifies a $15/hour wage. We may as well say they’ll be discarding those clearance items, since placing a $15 price tag on a $10 item virtually eliminates its chances of being sold.