It's Time To End Our Minimum Wage Psychosis

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The minimum wage is the perfect example of how Americans have lost contact with reality and exhibit delusional thinking. Simply because it sounds like it makes sense, Americans lap up the minimum wage elixir like dehydrated groupies of Jim Jones in the Peoples Temple.

Let's listen to the cognitive dialog that leads to false beliefs when we hear the words "minimum wage"

A minimum is the least amount needed.
Less than the minimum is not enough.
Everyone needs the minimum.
If a minimum is required, a minimum wage is necessary.
Without a minimum wage you will be exploited.
Being exploited is like slave labor.
Slavery is immoral, so the minimum wage is righteous.
And if the minimum wage is good, raising it would have to be better.
Who wouldn't want a minimum wage?

And our mind does not stop there.

Those against the minimum wage must want to exploit workers.
People who exploit workers are greedy and evil.
I am not greedy or evil so I support the minimum wage.
I am a good person who thinks correctly.

Of course not a shred of evidence, quantifiable data, critical thinking, or historical reality is tied to this chain of cognitive deceptions. Unfortunately the default setting for the human mind is to process information using simple schema to protect our fragile sense of self, our intelligence, and our need for control. The problem is that this natural process produces thoughts, feelings and assumptions that become steadfast opinions that guide behaviors and policy.

Unless we consciously use information with higher order reasoning to override what Thomas Sowell calls our "stage one" feeling and instinctive thinking, inaccurate beliefs will persist and rhetorical demagoguery will continue to work in destroying economic growth and efficiency.

There is little need to reargue the obvious economics of wage laws. That ship sailed long go; but if you are new to basic economics some information is in order.

A minimum-wage law is simply a form of price control preventing anyone from selling his labor below a certain price. Whenever a minimum price is established above the natural market exchange rate for labor, some portion of the labor market will not find a buyer/employer. It is a simple supply and demand question; the higher a wage you must give, the more people seek the wage and the less number of higher wage jobs will be offered. A minimum wage inevitably creates a surplus of labor and thus higher unemployment, especially among unskilled workers for which the wage laws are supposed to help. These facts can't seem to overcome delusional wisdom as minimum wage laws have been around for almost 100 years.

The first minimum wage, enacted in Washington D.C., was struck down in 1923 by the Supreme Court, which said the law was unconstitutional because it "restricted the worker's rights to set the price for his own labor." The precursor to the modern minimum wage law began in 1931 with the Davis Bacon Act; which allowed whites to discriminate against blacks in the workplace because it protected the wages of unionized white construction workers from competition with black workers. Stunningly, this remnant of Jim Crow is still on the books. The first federal minimum-wage law, the Fair Labor Standards Act, passed in 1938 under FDR.

Fast forward to today where President Obama asked for the minimum wage to be increased to $9.00 hour in his State of the Union Address. Let's get this straight; the first African American President of the United States advocates a Jim Crow law that increases unemployment to the very low skilled young minorities he claims he wants to help? When did a wage of zero become more of a "fair share" than a job and opportunity? That's just a shameful irony, Machiavellian politics, or shear ignorance.

And the mistakes in processing and political manipulation do not end with the minimum wage. We are also stuck on stupid by such euphemisms as, universal healthcare, undocumented worker, pro-choice, sustainability, and hate crimes to name just a few. All are disingenuous hyperbole disguised as sophisticated sophistry.

If we want to end the madness, we need to guard ourselves against buying into simple cognitions and passively listening to politicians use words alone to turn us into ignorant zombies. It is our responsibility to be informed and enlightened enough to actually think for ourselves. Reading, instead of tweeting and using Instagram, might be a good place to start.

The minimum wage, and other discredited policies that are allowed to thrive, is a classic example of a flaw in cognitive processing that politicians exploit for their own personal gain. It's time to back away from the grape juice bar, take the antidote of truth, and end our national psychosis over the minimum wage.

Dean Kalahar recently retired from teaching economics and pyschology.  He has authored three books, including The Best of Thomas Sowell, a user-friendly guide to Sowell's insightful thinking on a wide range of social and political issues. 

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