Since it tends to be our political left, in the form of the Democratic party, that pushes for higher and higher minimum wages, we really need to ask a question: What would worker’s wages be like today if the Democratic party never existed? If we consider the policies and laws that they’ve succeeded in getting pushed through, and the effects of those laws on American business, and on American workers, and imagine a world where those laws were not passed, how would that have impacted the well-being of businesses, our economy as a whole, and the wages of American workers? I will quickly attempt to answer these questions in this short article.
Now, think about this: the political left, in the form of the Democrats, always wants to raise taxes on businesses, increase the amount of regulations businesses are required to be in compliance with, and make the cost of doing business ever higher. These three things hinder economic growth, or to put it another way, they hinder the ability for businesses to grow and thrive and prosper by reducing their profit margins because of the increased costs of those imposed higher taxes, regulatory compliance, and costs of doing business.
And because that happens, it does a few things: first, because businesses are less likely to grow and expand, it takes away their need to hire extra workers, which reduces the aggregate demand for workers, when you think about all businesses collectively across the board; secondly, because there is less demand for workers, there is more likely to be a situation where workers are competing against each other for a limited supply of jobs, which tends to drive down wages in the working class, thus keeping their wages lower; thirdly, because there is less need for workers, it increases their chances of being unemployed. All of this hinders the use of natural market mechanisms in raising the wages of workers – that happens when businesses are competing against each other for workers, not when workers are competing against each other for a limited supply of jobs.
Think about the implications of this way of doing things. Every time the Democrats gain enough power, they do those three things that hinder economic and business growth, and because of that, it keeps wages down for the working class, as well as jacking up their unemployment rate.
So, what do you think would have happened if the Democratic party never existed? What would have happened if, because they never existed, they never gained political power, and imposed their policies and programs?
It would mean that they would have never raised taxes, massively increased the amount of regulations imposed on businesses, or massively increased the cost of doing business – because of that, businesses would have had higher profit margins, businesses and the economy would have grown faster, which would have resulted in much more job creation in the private sector, and thus a situation where businesses were competing against each other for a limited supply of workers. That fact alone would have driven worker’s wages higher and higher. In fact, in my estimation, wages would be so much higher than $15 per hour that we wouldn’t even be having this discussion about raising the minimum wage. My guess is that the minimum wage, not the average wage, would be between $25 and $35 per hour, if not higher!
So, what’s the lesson to be learned here?
Lesson Learned: the political left in the form of the Democratic party created a problem (low wages) with their bad policies (high taxes and regulation costs), and they think they can solve that problem by creating even more bad policies (higher taxes and more regulations), even though it will only make things worse (hinder natural wage increases).
So, that’s what wages would be like for the working class if the Democratic party never existed.
