Everything that is costly, is used less. Everything that gets costlier, is used lesser than before.
This simple law of economics, and an everyday experience, is known to the Leftists also. That is why they demand confiscatory taxes on things they do not like, knowing fully well that because high taxes would make the thing costly, people would use less of it, buy less of it, and its demand would go down. For example, recently they demanded, and got, a tax imposed on the trucks moving through Delhi, to force them to avoid Delhi.
But somehow, when it comes to wage rates for the workers, Leftists always suffer a loss of memory as far as this law of economics is concerned. They all the time demand higher wages, and most of the time succeed in forcing governments to mandate higher wages. And consequence for the workers is same as for everything else: people stop hiring them, those who already have jobs get laid off, and employers either find automation, or simply shut down the business. In study after study, it has been shown that higher wages do not benefit workers, as everything gets costlier, thus negating the raise in wages. Only, unemployment increases, and politicians then play saviours by instituting unemployment benefits. Manufacturing in the west has been destroyed through wages laws, including minimum wage law.
Minimum wage laws are illegal and unconstitutional in that they interfere in the private contract between employer and employee, and have the same effect as any other interference in the economy by the government has; they destroy economy.
But Leftists love to play benefactors of the workers, and politicians love to play populists, and in country after country, workers lose their jobs as a result of the minimum wage laws.
And so it comes as no surprise that the higher minimum wage mandated in the UK is leading to loss of jobs there. A news item from The Times of India has details:
“LONDON: Concerns among British employers about a new, higher minimum wage are contributing to a sharp slowdown in hiring via recruitment firms, according to a survey published on Thursday.
The number of people hired last month for permanent jobs via placement companies grew at the slowest pace since early 2013, when Britain’s economy was just starting a recovery, the Recruitment and Employment Confederation (REC) said.
REC chief executive Kevin Green said the introduction of the higher minimum wage from April next year was causing companies in some sectors to think about investing more in automation.
“This might have a positive impact on UK productivity, but it could also put the brakes on employment growth,” he said.
Chancellor of the Exchequer George Osborne has said the minimum wage will rise by 40 per cent by 2020. Britain’s budget forecasters expect the change to cost a relatively low 60,000 jobs.”(from the news item.)
(To read an earlier article on the subject, click on the title below:-Ed)
1. “Minimum Wage Laws: Immoral, Crippling, and Nevertheless Supported by Many”
