If there were no minimum wage in the United States, how low would wages go?


Revisiting a topic I’ve discussed on this blog before, there was a new article on UK Yahoo, much to my surprise:

http://uk.finance.yahoo.com/news/should-we-scrap-the-minimum-wage.html

If there were no minimum wage in the United States, how low would wages go?  Would inflation come to an end?  How far might price deflation go?   Would outsourcing of American jobs stop immediately?  Would the power of labor unions increase or decrease (assuming freedom of contract and freedom to strike were preserved as a matter of constitutional right)?  Would anyone ever bother to immigrate illegally into the United States again? 

According to Wikipedia, “Many countries, such as NorwaySwedenFinlandDenmarkSwitzerlandGermanyAustriaItaly, and Cyprus have no minimum wage laws, but rely on employer groups and trade unions to set minimum earnings through collective bargaining.”  Is it coincidental that these are some of the countries with the highest standards of living in the world?  Higher than the standard in the United States?

The minimum wage was instituted in the United States as a matter of Federal Law in 1938, five years into Franklin D. Roosevelt’s New Deal.  Richard M. Nixon tried to impose “wage and price controls” as an antidote to inflation in 1971-72.  Nixon’s program was an unmitigated disaster and has not been repeated, but because of the mythology that the minimum wage guarantees a “living wage”, the Federal Minimum Wage is updated every few years.  It is an absurdity that one of the causes of inflation is automatically adjusted upwards to inflation.

My position is that government regulations such as the minimum wage stoke inflationary fires and provide no real security to anyone.  If elected to the United States Senate, I would propose a repeal of the Federal Minimum Wage and add a statutory clarification that any state-imposed minimum wage would constitute an unconstitutional infringement on the rights and obligations of contract, an infringement on Freedom of Association and Freedom of Speech, and a taking of liberty without due process of law.  

Let’s try to bring America in line with the most prosperous nations of Europe—ABOLISH THE MINIMUM WAGE!  MAKE AMERICA COMPETITIVE AGAIN!  Require EXCELLENCE in PRODUCTIVITY before automatic rewards.  

Oh, by the way, adjusted for inflation and currency, the average worker’s wages in Austria, Germany, Denmark, Sweden, and Finland, at least (countries with which I have some familiarity and have studied recently) have higher EFFECTIVE wages and lower rates of inflation than the United States of America.  Finland supposedly has the finest education system in the world.  America’s public educational system is a nightmare failure and should probably be abolished all together as one of the first and principal failures of governmental compulsory “welfare” laws.

One response to “If there were no minimum wage in the United States, how low would wages go?

  1. It is worth noting that all of the countries you mention rely on strong labor unions and collective bargaining to protect their working class…something the U.S. government seems determined to eliminate.

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