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Government Trying to Raise any Group’s Wages is Always a bad Deal

Posted: February 13, 2017 at 8:21 pm   /   by

Among the different discussions following every Super Bowl, a prominent source of debate seems to always be the game’s commercials. This year, in addition to the typical opinions about which ads were good or not, the underlying politics of the companies’ messages became a hotly held conversation. The two spots that seemed to cause the most political intrigue were Budweiser’s brief history of their German-born founder as he immigrated to America and Audi’s pledge to equal pay for women. Both of these advertisements were seen as being controversial by at least some.

It’s not hard to see why these corporations chose to convey these messages in what would assuredly be their most watched commercials. Embracing immigrants (or those different from you) and paying different people the same salary for the same work regardless of gender is usually looked at as a social good to be strived for. Thus, those companies who champion those ideals would be looked at favorably by the public. But are women really paid less for the same work and what parallels can we see by observing the misguided legislation to raise the wages of both women and immigrants in the American workforce?

The gender wage gap, as defined by the left (and almost certainly Audi), is a complete myth. When adjusted for hours worked, type of job and time spent away to have and raise children that pay gap shrinks to virtually nothing. So a woman getting paid less than a man is not about sexism and more about the choices women make during their lives. Valuing things like spending time away from work due to lifestyle differences, women will inevitably be somewhat less valuable as an employee when compared to a male counterpart who can focus more of his time on his job.

So what will happen if “equal pay” legislation is introduced to the American workforce? Well, rather than an employer simply raising the salaries of all of his female employees to the level of males, the options that women have with regard to their jobs will simply cease to exist. For example, a women with small children may choose a lower salary if it means she can work from home. The introduction of a new law forcing her employer to pay her the same as a man who shows up at the office every day (and is thus worth more to the company) will not cause the employer to cave and pay her the new, higher amount. Instead, the option of working from home will now disappear since it will now not be worth it for the company to pay an at-home worker the same salary as an office worker.

Similarly, progressive activists have the same effect on immigrants when advocating for increased wages in the form of minimum wage laws. According to Cato Institute economist Alex Nowrasteh:

“Immigrants are more likely to be lower-skilled workers, exactly the types of workers most likely to be harmed by a higher minimum wage.”

Due to less education, a lack of experience and a more limited grasp of English, the labor of immigrants is often not as valuable as that of than their native-born counterparts. This would certainly account for a lower wage being made by those immigrants who fit any of these descriptions.

Now, if there were a law which increased the amount an employer had to pay an employee, would all of those employers who had hired immigrants all of the sudden pay them as much as the more valuable and more experienced workers? Most likely they would not. Rather, the opportunities for those inexperienced and uneducated immigrants would simply disappear. Raising the minimum wage would eliminate the bottom rung of the ladder that these individuals would often use as a stepping stone to gain the experience which they currently lack.

Fortunately for many immigrants of America’s past that there was no barrier to entry like the minimum wage to keep them out of the workforce and prevent them from making better lives for themselves. Had there been laws like this, many immigrants hired at Budweiser’s St. Louis brewery (and other jobs) would have been unable to have that opportunity. Likewise, preventing women from having the flexibility to choose a lower salary has the same effect. Writing laws to force employers to pay a higher salary to a particular group, whether immigrants or women, destroys the opportunities for both groups by failing to account for the situational differences that result in the difference in pay. Getting rid of both so-called equal pay laws and minimum wage laws is what will actually help the groups that this legislation was intended to benefit.

Image:  Wikimedia Commons 
License:  CC BY-SA 3.0

Matt Doarnberger

Matt Doarnberger runs the website libertariansportsfan.com/wp. He is a 2003 graduate of Salisbury University (Salisbury, MD) and lives with his wife and children in Harrisburg, NC. Articles of his have appeared at Mises Daily and FEE.org. Follow him at www.facebook.com/libertariansportsfan and on twitter at @LibertarianSF.

Government Trying to Raise any Group's Wages is Always a bad Deal