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Grading on the Curve

Columnist: Norman Rosinski
December, 2015 Issue

Norman Rosinski
All articles by columnist

Trying to socially engineer wealth equality using tools to harm people, who’ve worked hard to succeed is a fool’s errand.

Welcome to the December Growth/No Growth issue of NorthBay biz magazine. This is another of the issues we particularly enjoy producing each year, as it gives us a chance to shed light on the lively and controversial topic of growth in the North Bay. In addition, there’s also a special report on senior health and wellness. So, please enjoy all the stories, special features and columns in the areas only locally owned, formerly glossy business publication celebrating 40 years of serving the North Bay business community.
As I write this, I’ve just returned from the monthly Sonoma County Alliance breakfast meeting, where I had the pleasure of hearing Dr. Steven Cueller, Ph.D., a professor of economics at Sonoma State University, speak on the impact to the economy of raising the minimum wage and the related topic of income inequality. Professor Cueller gave an impressive talk and did his best to present both sides of the argument on this controversial subject, letting audience members decide which side of the issue they support. Since I’d already determined to address this same topic in this month’s column, I was listening closely to his presentation with the hope I might broaden my knowledge base and, perhaps, write a better column. It’s affirmative on the former and you can be the judge on the latter.
There’s a 50-year history, or more, of economic theory, backed by studies and evidence, that supports the notion that increasing the minimum wage costs jobs. An ancillary effect is that it also contributes to inflation, as the price of goods and services often rises following a minimum wage increase. Raising wages for entry-level workers certainly helps entry-level workers, but it reduces the number of those positions available in the market at any given time. Given that, at present, we have more than 90 million able-bodied Americans not working already, does raising the minimum wage seem like a sound strategy?
Predominantly, minimum wage jobs are positions occupied by younger, less skilled people just getting their start in the workforce, gaining experience before moving on to better paying positions. Again, does it make sense to limit the supply of entry-level jobs and force employers to pay more for employees than their experience—or the market—dictates?
Both sides of this issue can probably agree the “American Dream” is under assault. Their ideas on how to remedy this, however, are vastly different, and the minimum wage dispute is just one factor. The bigger issue, “income inequality,” has populist candidates offering solutions that hurt everyone in the name of “fairness.” Trying to socially engineer wealth equality using tools to harm people, who’ve worked hard to succeed is a fool’s errand. Raising taxes and writing more job-stifling regulations meant to punish the successful don’t do anything to raise up the unsuccessful. It simply lowers the bar as wealth is redistributed. Sometimes, I think what they’re really saying is, everyone can be happy once we’re all miserable together.
Here’s a novel idea: Let’s implement an old formula to increase everyone’s chance for success. To start, stop creating a climate where the successful are blamed for everyone else’s failure. Start protecting equal rights and stop granting special privileges to some groups while imposing special burdens on others. The government has no place picking winners and losers based on ideology or the amount of money any special interest group donates to rig the system. The market itself is the only impartial savant. The key to a prosperous economy is to put into place policies that enable and encourage success—not stifle it. People are entitled to pursue their dreams on a level playing field and earn whatever they can based on their contributions to productivity.
Everyone has differing abilities, ambitions and ultimate goals. To expect somehow to engineer equality in outcomes is to live in a utopian fog. It’s a given that economic success won’t be equal, but the outcomes for the successful don’t mean their success held anyone else back. In fact, their success should inspire others to emulate it. Government intervention into the free market is the real roadblock. Proponents of forced income equality don’t want equality in the marketplace at all; rather, they want a leveling of success to a lower common denominator. The equality that matters in the end is the equality of rights. To all the champions of “fairness,” all I can say is, tearing down the successful isn’t the way to build other people up.
Well, that’s it for now. I have no idea if Professor Cueller will be reading my column, but if he does, I hope he grades on the curve.
Enjoy this month’s magazine.


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