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November 10, 2015

The Minimum Wage and the Entitlement Mentality

 

The minimum wage creates an entitlement mentality—a mindset already rampant in the U.S.—and you can see that mentality on display among demonstrators demanding an increase in the minimum wage.

The minimum wage and entitlements may, at first glance, seem like opposite issues, since the minimum wage only pays when a person is working while means-tested entitlement programs often pay only when a person is performing little or no work. 

In fact, they are cut from the same mold because they both are income transfers that provide financial benefits to people who did not earn them, which is why the left embraces them both. 

Both the minimum wage and means-tested welfare programs exacerbate the entitlement mentality, where people believe the government—that is, taxpayers—owes them a good living. 

Most people understand why welfare programs—especially those not tied to a work requirement—can create an entitlement mentality. But minimum wage increases, especially large ones like the $15.00 per hour increase, have the same impact because they pay workers more than they could make (or produce) in the market. 

For example, if a low-skilled worker is paid $10.00 an hour because that is the value of the productivity he or she brings to the job, then arbitrarily raising that wage to $15.00 an hour provides him with an extra $5.00 an hour he doesn’t economically deserve. 

But instead of that money coming from taxpayers, as it does with entitlement programs, it comes from profits or stockholders—or from other workers in the form or lower wages or benefits.  

Minimum wage defenders are pitching the “efficiency wage theory,” which claims that higher wages, even when government imposed, make workers more productive. To see the nonsense of this argument, consider labor unions. 

When a lower-paid worker gets a union job that significantly boosts his or her wages for doing essentially the same tasks, the employee is initially elated. But within a relatively short period, that attitude often changes from gratitude to entitlement. The employer OWES the union worker that above-average wage and benefits—and ought to be paying much more.  

The welfare state has expanded dramatically, and intentionally, under President Obama. But the entitlement mentality has expanded even more, as Obama and the left try to hand out even more benefits (i.e., higher wages) and convince recipients that they deserve them.


 

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