Is there anyone out there working for a living who would not like to make more money at his or her present job? Of course not. Everyone would like to earn more.
But in a sensible, market-driven economy, jobs must pay what the market determines they are worth. Wages must not be based on the whims of politicians seeking to curry favor with one interest group or another. When wages are artificially manipulated, job losses inevitably follow.
So it is worrisome news that top House and Senate Democrats in Massachusetts announced a deal this week to increase the minimum wage in the Bay State to $11 an hour from its current level of $8 per hour. The increase would come in annual steps of $1 per hour beginning in January 2015 until $11 an hour is reached in 2017.
The proposal outdoes the call from President Obama for a national minimum wage of $10.10 per hour. It raises a valid philosophical question for legislators: If setting wages by force of law is good and more money per hour is better than less money per hour, why stop at $11 per hour? Why not set the minimum wage at $15 per hour or $20? Why not go for broke and make it $25 per hour? Think of the income tax revenues the state could collect if every worker were paid at least $25 per hour.
Why not? Because we believe even the most progressively addled mind on Beacon Hill would be forced to acknowledge that, at a $25 per hour minimum wage, a great number of employers would simply say farewell to the Bay State and take their business elsewhere. And those that remained would certainly think twice before adding any more of these expensive workers to their payrolls. Unemployment would skyrocket; tax revenues would plummet. We could proudly pat ourselves for being the most “progressive” state in the nation while most of our workforce languishes in the unemployment line.