The Oppressed Worker and the Fed Chair

“Then I will draw near to you for judgment; and I will be a swift witness against the sorcerers and against the adulterers and against those who swear falsely, and against those who oppress the wage earner in his wages, the widow and the orphan, and those who turn aside the alien and do not fear Me,” says the Lord of hosts. – Malachi 3:5

A few weeks ago there were a number of stories out about fast-food workers protesting for higher wages (here’s one from Baltimore). The minimum wage versus living wage debate seems to have gotten into swing again, with living wage proponents pointing out (rightly) that you can’t support your family on minimum wage. The point isn’t wrong, it is just poorly posed as it perverts the authority/responsibility paradigm. More on that in a moment.

First, let me point to my position on the issue, and then we’ll get to the current debate and who is truly “at fault” in the plight of the McDonald’s-working-masses. I believe in equality before God.We are all created in His image, and any attempt to raise one above another runs counter to this premise. I believe in the Golden Rule, which dictates that when I consider how I will treat you, I must do so from the vantage point that I am not more special (in God’s eyes) than you and must make my decisions based on our equality. The easiest way to do this of course is to put myself on the receiving end of my actions, so that I am able to understand their consequences.

Because of these positions I am opposed to government intervention in the free market exchange. Or, more-to-the-point, I am opposed to democratic interventionism in the free market exchange. If neighbor A and neighbor B agree freely to exchange a certain amount of work for a certain amount of money, I find no place under equality before God and the Golden Rule for me to inject myself into that exchange. It is because of my belief in God, because of my belief in equality, because of my commitment to the Golden Rule, that I oppose minimum wage laws.

OK, back to the debate. The arguments coming from the living wage folks appear to be two-fold: (1) the workers can’t support themselves on these meager wages and (2) the wage hike would only cost McDonald’s (or some other employer, like Walmart) a small amount, so they can afford it. Both of these arguments are correct, but neither is justification for mandating higher wages.

The notion that an employer has a responsibility to care for the basic needs of his employees is a step beyond the free market exchange. It views employer as “slave master” and employee as “slave” – because responsibility implies authority and vice-versa, and there is just no way around it. If I have a responsibility for the most basic aspects of your life, then I must have authority over them as well. Paradoxically, the living-wage argument takes one wrong master-slave argument (worker is slave of employer) and stands it on its head (employer is slave of worker).

As for the second argument, (that the wage hike would only cost McDonald’s “a little bit”) it obviously doesn’t justify violating the Word of God and injecting “majority rule” over freedom and equality. Beyond this, it is an argument in a vacuum. If nothing else changes the wage hike will only cost McDonald’s (or Walmart) a little bit, but something else always changes. McDonald’s has to raise prices just a bit (I heard 17 cents a burger somewhere), but if this causes even one less person to buy a burger then “something else” has changed. (The same holds for liberals who argue that we could just raise taxes to close the budget deficit – but raising taxes doesn’t necessarily raise revenue, because people change their behaviors in response.)

Who Then Shall We Blame …

So we clearly have a problem. People who get up in the morning and work hard all day can’t afford to keep going (pay their bills, feed their families, pay the rent). Belief in equality and freedom limits the ability to legislate a solution, but the problem persists and care for our brothers (created in the image of God) says we really ought to be concerned.

Enter the Federal Reserve. News came out just yesterday that Larry Summers had withdrawn his name from consideration. Summers is no monetary “hawk” by any stretch, but he was apparently not as loose with printing money as the now expected chairwoman – Janet Yellen.

Before I dive into the Yellen situation, let me just remind the reader that fiat currency systems are the mode whereby developed economies transfer money from the poor and middle class to the wealthy. As Mish and others have pointed out time and again, those with “first access” to newly printed money (the wealthy and connected) receive all the benefit, at the expense of those with last access (the poor and middle class).

OK, back to super-dove Yellen. I was reading up on the Fed-Chair-apparent yesterday and found an article that declared Yellen not to be a super-dove, but only dovish in the current setting. I laugh … but let’s consider “the current situation” for a moment, as it pertains to the Federal Reserve.

The Fed has a dual mandate: stable prices and full employment. They define each of these poorly. Full employment is somehow defined as a low unemployment rate – but the unemployment rate is a critically flawed statistic. It ignores people who are working part time because they can’t find full-time work. It ignores people who have given up looking for a job. It ignores people who have decided to participate in fraud (e.g., disability fraud) to avoid having to work. It misses so many things that matter that one could conclude (as I do) that it is hardly an appropriate statistic to measure the health of the job market.

Then there is inflation, which is defined by the Fed as “price increases” (not to be confused with actual inflation, which is an increase in money supply). But, of course, price inflation doesn’t include food or gasoline. I can tell you that as a father of four, and owner of a car big enough to transport them, that food and gas are about all I buy. If increases in these don’t count as “price inflation” then what does? (Side note: since the 2009 low, milk prices are up 80%, crude oil is up 270%, cattle is up 56%, and soybeans are up 80% … nope, no inflation here.)

So here we have the Fed, with two flawed gauges and one tool – a hammer, err, printing press. If the flawed unemployment gauge is high and the flawed price gauge is low, they print. In fact, as long as the flawed price gauge is low, they feel free to print away. It matters not whether printing actually improves the jobs market (there is ample reason to believe it doesn’t). The Fed is bound by its limited policy tools and its theocratic belief that “printing helps” to continue its policy of money transfer from poor to rich until the flawed gauges show progress.

So in comes Yellen (presumably – Obama hasn’t made an announcement yet), with a commitment to printing (and thus the welfare of the wealthy) that exceeds even Bernanke’s. Side note, for your pondering, do you remember when the “left” gave Reagan such trouble about his “trickle down” economics? The notion that benefits given to the wealthy would flow through the whole economy and benefit everyone? Well, if the news is to be believed, Summers withdrew has name from consideration due to protests by democrats … who favor Yellen, more committed to trickle-down economics than any Republican in  history. Reagan just wanted the high wage earners to keep what they produced. Yellen actually wants to take from the poor and give to the rich. How are those principles holding up over there, lefties?

The Oppressed …

In Malachi 3:5 the Lord indicates that he will be a swift judge against those who oppress the worker in his wages. I offer that the oppressor here is not the employer who makes and agreement (pay for work) and lives up to it, but rather the central banking system who continually takes money from the worker, reducing the value of his wages, and driving up the prices he must pay for basic necessities. Like all good shell games though, the oppressors have us turned in the wrong direction, arguing over the legitimacy and morality of minimum wage laws. From where I sit, the oppressive behavior is the coming from the organization that controls the “dollar” itself, and that is where the outrage should be directed.

I don’t fault Bernanke or Yellen or the super-rich here. Their god is money and they serve their master faithfully. But in a nation where 80% of the people self-identify as Christians, such a system should not be allowed to continue.

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2 Responses to The Oppressed Worker and the Fed Chair

  1. jefe says:

    So how should we change the system?

  2. nomasir says:

    Change eh? Well, there are a lot of angles here. From a political standpoint, I think we need to stop the back-&-forth of the minimum wage head-fake. The argument is utterly wrong, and that’s exactly what the wealth-interests want. Workers demanding more pay, because prices are going up. Employers demanding freedom to run their businesses, because COSTS are going up. All the while, the uber-rich, the Wall Street bankers, the hedge fund managers … they’re all laughing to the bank.

    As for actually tweaking the system to get something CLOSER to sound money, I favor an unconventional starting point: end all capital gains taxes. Yes, that means the already rich can make their money on stocks without paying taxes. But, it ultimately also means that the rest of us can store our excess production (that is, our dollars saved for a rainy day) as something other than dollars. It lets us get out of the system too. In the modern market system we can easily move in and out of asset classes, like gold, to hold our savings.

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