Think Freely Media presents Common Sense with Paul Jacob

Fox News’s Bill O’Reilly and 2012 Republican presidential candidate Mitt Romney agree with America’s progressives: raising the minimum wage is common sense.

The Swiss had a chance to prove their solidarity with that notion yesterday, when they voted on whether to establish a minimum wage in the country, a rather high one of 4000 francs per month (something close to 22 francs per hour). They voted the proposal down.

Overwhelmingly. By over 76 percent.Frederic Bastiat's classic essay, What Is Seen and What Is Unseen

Unlike in America, this minimum wage would have affected a huge hunk of the population. One out of ten Swiss workers earns less than the proposed minimum. In America, only about a single percentage of workers earns close to the national minimum.

This matters, as Frédéric Bastiat clearly explained, because price regulations can have two effects: a loss of production, or none at all — “either hurtful or superfluous.” No effect, when the price floor (as in a minimum wage) is set lower than the level most prices are already at (or, for which workers already work). But when the price floor gets set higher, goods go off the market — with too-high wage minimums, workers with low productivity cease to get hired.

Swiss voters could scarcely afford to risk the jobs of ten percent of the workforce.

In America, raising the minimum wage is usually a matter of sacrificing a few people (whom voters mostly don’t know — Bastiat’s “unseen”) while rejoicing in the higher wages of those workers retained (the “seen”).

In Switzerland, the government declared the down vote a victory for common sense.

Which it was.

This is Common Sense. I’m Paul Jacob.

By: Redactor

8 Comments

  1. This excellent article should be amended to include the price in U.S. dollars. 22 Swiss Francs = $24.80.

  2. JFB says:

    There is no real thought process in spending other persons money, or, for that matter, squandering human lives.
    The minimum wage debate is a prime example of economic illiteracy, apparently the Swiss voters are not as undereducated and the Americans.

  3. I agree with Richard Rider. My first thought when reading your column was “What’s 22 Swiss Francs in real money?”

  4. JATR says:

    Apples, oranges. $24.80; $7.25.

    Not a valid comparison.

  5. […] was pleased to see links to those editions in a recent Common Sense squib by Paul Jacob, on the Swiss minimum wage plebiscite. Mr. Jacob referred to a great passage in […]

  6. Drik says:

    Every job lost becomes a voter dependent on the government.
    Most likely the voting Democrat.
    Why wouldn’t the Democrats support it?

  7. Linda Liberty says:

    The CBO estimates that about 500,000 people will lose their jobs if the minimum wage goes up to what they want. I would like to ask those that are protesting which one is willing to lose their job or alternately which person they would like to choose to lose their job.

  8. Drik says:

    Why not $100 an hour minimum wage?
    Why not $1000 an hour?
    The logic works just as well for those questions.

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