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April 21, 2006 [LINK]

A "living wage" at U.Va.

Seventeen University of Virginia students were arrested on Wednesday and spent the night in jail after refusing to vacate Madison Hall, which they had occupied for three days to back up their demands for a "living wage" for all university employees. To them, that means $10.72 an hour, which is a pretty good chunk of change where I live. President John Casteen, to his credit, ordered the arrests after the students refused his offer to join him in a lobbying effort in Richmond. Civil disobedience has its place in our democratic society, but failure to cooperate with a sympathetic public official is just plain dumb. Don't get me wrong, I respect the earnest desire of the students to improve society, even if they are clueless about market economics. The story drew the attention of the Washington Post, but the Charlottesville Daily Progress has all the details, first hand.

Here's the thing: Raising the minimum wage always favors people who already have a job, since employers find it easier to absorb or pass on increased labor costs than figure out how to get by with less help. On the other hand, it discriminates against people who are looking for a job, because it makes employers more reluctant to take the risk of hiring someone who is an unknown quantity. Because most people have jobs, therefore, raising the minimum wage is almost always a popular cause, even though most people are vaguely aware that it might be a bad idea. What it does, basically, is create an artificially high first "step" for new job entrants to scale on the ladder of life. Some of them give up trying, and turn to a life of crime.

But the "living wage" campaign isn't really about the legal minimum wage, because it is only targeted at an institution that is insulated from the competitive market pressures of supply and demand. Education, like health care, is heavily subsidized by the government and paid for to a large extent by "third parties" (student loans, health insurance, etc.), so there are few if any constraints on costs, which therefore tend to rise faster than the overall rate of inflation. So it's easy to push for higher wages when the burden will be shared by the general (taxpaying) public. Who's going to object?

One of the ironies of the situation stems from the socio-political makeup of Charlottesville, derided as a "people's republic" by many on the Right. It is one of the wealthiest urban areas in all of Virginia, and yet one fourth of the city's residents are said to live in poverty. Why? Well, Democrats have controlled the city government for decades, raising taxes that discourage small business formation and hiring. It is a socialist paradise like Massachusetts, which means it's hell for anyone who has to worry about the bottom line. They are stuck in a rut of liberal (or leftist) orthodoxy, too preoccupied with chasing utopia to consider the possibility that their policies may be making things worse for the people they care about.

Here's the final irony: Whenever businesses are obliged by the government to increase wages or benefits, they are tempted to cut costs by just hiring illegal aliens. Somehow millions of people from south of the border are scrambling to take jobs in places like Charlottesville where living conditions for the working class are supposedly so harsh. Does anyone recognize a certain inconsistency here? Would I be wrong in assuming that most if not all of the earnest activists pushing for a "living wage" also oppose restrictions on immigration or enforcement of immigration laws? Is that because they are simply incapable of grasping the likely consequences of what they advocate, or because they know full well that pushing wages to artificially high levels will create more demand for illegal labor?

More "Shad Planking"

Another local Republican went down to Wakefield for the Shad Planking, Chris Green. He has quite a thorough report at Spank That Donkey.

Posted (or last updated or commented upon): 22 Apr 2006, 12: 16 AM

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