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There's a very good reason we don't let politicians set interest rates or the money supply: they're short-sighted and constrained by the whims of constituents. This is not an insult, it's simply a fact. So why do we let politicians set the minimum wage, tax rates, or tariffs?
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This is not a dig at any single administration, rather, the system as a whole system: our system is flawed and woefully inefficient. Many fortunes in this country have been made by exploiting the very inefficiency in government that have kept countless people in poverty.
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To prove it, ask yourself this question: Is there any such thing as a good or service you could buy or sell where the price will not change for 10 years?
Surprisingly, the answer is "Yes", unskilled labor. The minimum wage of $7.25 hasn't been changed since 2009.
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Surprisingly, the answer is "Yes", unskilled labor. The minimum wage of $7.25 hasn't been changed since 2009.
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Minimum wage, in an of itself, is an inefficient policy that creates a deadweight loss in labor allocation; however, by far the greater inefficiency is to have it fixed for a decade. Wages, like everything else in a market economy, should be dynamically determined, not static.
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Instead of a flat national price, minimum wage should be a function of Real GDP, a Regional Cost of Living index, plus a constant wage (ex, Wage = f(rGDP, regCost, c)). Standardizing wages by Regional Cost of Living ensures that a higher wage won't overburden poorer regions.
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Standardizing the wage regionally also ensures against the waste of a national minimum wage. The problem is so serious that even if they increase the minimum wage to $15/hr, it will still be too low in some areas and too high in others. They need a new framework based on data.
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I'm not saying scientist and technologist are more valuable than politicians (trust me they are, but I'm not saying that here
). What I am saying is that politicians are the decision-makers but they should be required to allow scientists to optimize those decisions.
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). What I am saying is that politicians are the decision-makers but they should be required to allow scientists to optimize those decisions.end/
