Unskilled workers unwelcome
In the name of “fairness,” 53 Canadian economists penned an open letter earlier this month saying it should be illegal for Ontarians to work for less than $15 per hour. In other words, 53 economists agree that anyone who lacks the skills to generate for their employers $15 of hourly value must not be allowed to work.
Just as it is impossible for somebody with only $ 12 in his pocket to buy something priced at $ 15, somebody whose skills generate only $ 12 of value hourly will be unable to sell his labour for a $ 15 wage. This is clear. Yet the 53 economists claim that raising the minimum wage to $ 15 per hour will not kill jobs.
The implication is that each of the roughly 633,000 Ontarians currently working for the minimum wage ( plus all the others working for under $15) are capable of contributing at least $15 per hour to their employers’ bottom lines, and would be paid as much if only their employers weren’t greedily exploiting them.
It’s little wonder these 53 people describe themselves as economists, not entrepreneurs. Before the Liberals mandated the $15 minimum wage, they all apparently sat on their hands rather than seize on the opportunity that there apparently were, across the province, hundreds of thousands of workers capable of producing $15 worth of value, but making less than $ 12. Rather than snap up those workers with slightly higher wages and then unleashing their valuable, untapped productivity to great profitability, they instead write open letters urging the government to force employers to do what the economists were unwilling to stake their own money doing themselves.
And this, they claim, is helping entrepreneurs — despite the fact that employers overwhelmingly oppose the minimum wage hike — because “raising the minimum wage makes for better, more productive workplaces” and makes companies more efficient.
But they also admit that a small number of young workers would probably lose their jobs if the minimum wage is raised. They also seem to concede ( by arguing that only “some” of the additional net costs from rising labour prices “may go to price increases”) that businesses would be less profit- able. This would necessarily knock some businesses into unprofitability, forcing them to close.
Somehow the 53 economists still figure that “raising the minimum wage could play a role in economic revival.” So we will have fewer young people working (which will cost them valuable job experience, damag- ing their long- term career prospects) and some businesses will fail, but the economy will grow faster. If that’s what the economic formulas say, the arithmetic is clearly broken.
The incontrovertible law of economics being ignored here by these 53 economists is that we can only consume what we first produce. The economy grows only when we produce more. Making it illegal to use inexpensive labour in production will reduce production, shrinking the economy. It cannot be otherwise.
Meanwhile, the Ontario Liberals have embraced the nonsense that raising the minimum wage helps create economic prosperity. In a recent email blast, Ontario Labour Minister Kevin Flynn says it is a “fact” that “increasing the minimum wage is good for everyone.” Making inexpensive labour illegal, the Liberals claim, will “lead to better outcomes for businesses, employees and the economy.”
Summarizing the Ontario Liberals’ bizarre philosophy in one line, we are made richer when the government forces us to pay more for everything. At last we have found an explanation for their approach to energy prices.
A WORKER WHO CAN ONLY GENERATE $12 OF VALUE WON’T BE ABLE TO SELL HIS LABOUR AT $15.