The religious spring festivals of Passover and Easter are behind us. We’ve paid our taxes. Congress has passed another bill to give the top two-hundredths of one per cent another windfall. I think a big-picture look at the structure of this economy might help us all take a deep breath. If my guess is correct, we’ll need it for the work ahead. This kind of economy stands on three legs: raw materials, cheap labor and as little regulation from government as possible.
Raw materials were the reason why Europe’s empires stumbled across the Western hemisphere in the first place. Looking for an easier route to the profitable spice markets of the East Indies, the Spanish found the West Indies and began a centuries-long exploration and exploitation of everything it uncovered. Extraction of natural resources – from tomatoes to gold to, one day, black gold – led those powers to exploit South and Central America as well as Africa,
With Los Angeles Mayor Eric Garcetti and six city council members proposing an increase in the minimum wage, the issue sits firmly on the front burner of L.A. government. Of course the Chamber of Commerce and its allies wring their hands and predict disaster, and some economists are throwing scary statistics back and forth.
Will raising the minimum wage to a livable income raise prices? Probably a bit in some parts of the economy. Will people lose their jobs? Probably a few in some sectors, for a short time. Will the economy grow as a result of poor people having more income to spend? Again, probably. Will life be better for low-wage working families? Undoubtedly.
Minimum wages should provide enough income for working families to put shelter over their heads, food on their tables and clothes on their backs. Employers should pay working people enough to not require government and taxpayers to supply the basic needs of a family.