Mises Institute: Mises Daily: Julian Adorney: Killing the Maximum Wage Myth
This post was originally posted at The New Democrat on Blogger
People on the far left get labeled as Socialists because they have a tendency to advocate socialist policies that are more common in Europe than in America. The notion of "maximum wage" that talk show host Bill Maher began advocating back in February is a perfect example of this.
It's is almost impossible to ignore the hypocrisy of Bill Maher on this issue, especially since he's part of the financial one percent that he likes to bash and call greedy. If he thinks that these people make too much money, he could initiate the correction by living on three-hundred-thousand dollars a year, his suggestion for the Federal maximum wage. He could donate the rest of his income to Uncle Sam or his favorite charity, if he has one. He could begin by setting the example of unselfishness and compassion that he wants to impose on the rest of the country by law.
The idea of a maximum wage is a bad idea. Americans, as much as anyone, are guilty of human nature. We need to be incentivized in order to be as productive. "If you do this, we'll give that and the better you are at doing what we want you to do, the more we'll pay you for it". Capitalism and private enterprise are built on incentive, supply and demand. The better you are at something, the more money you'll tend to make by providing that service to the market.
Do we have overpaid CEO's and do companies and employers tend to set wage rates instead of the market as a whole? Of course, but that doesn't get fixed by telling people "once you make a certain amount of money Uncle Sam is going to take most of everything above that amount from you." Instead, we should focus on the lower middle and bottom end of the economy and empower and incentivize those people to be as successful as possible.