Capitalism and the Minimum Wage: “I Got Mine, Screw You”, by Fred Reed. Musings on the role of work and rewards:
Among the fantastic trappings of “free enterprise” … is that it rewards hard work and determination, which if pursued will lead to prosperity. This is both believed and beloved by many who believe it in part because for them it performed as described. The intelligent, healthy, ambitious and – a major advantage – unscrupulous can usually get ahead. And so, talking with others like themselves, they ask, “If I can do it, why can’t they?” The underlying notion is that the poor are poor because they are lazy and lack ambition. Some fit the description. Lots don’t.
The topic of ability is normally not talked about:
A woman of my acquaintance once said, “In Washington, you assume that everybody is in the 99th percentile.” … Cognitive stratification is very real, though seldom noticed and never mentioned. The city attracts the highly bright. They hang out together. They date. They marry. They don’t know anybody who is not like them. The same holds in many places, and on the web, but Washington is where policy comes from.
By and large they are neither arrogant nor snobs. Since they are all in the same bracket, snobbery would be difficult. They include a great many journalists. It is fun to speak of the press as imbeciles, but, apart perhaps from babble-blonde anchors chosen for their looks, they are not. The duller probably clock an IQ of 120. Even at dismal publications like Army Times and Federal Computer Week, with both of which I was once familiar, you find very smart people.
Some consequences of cognitive stratification:
What has this to do with the minimum wage? A fair amount. People of IQ 130 and up tend to assume unconsciously … that you can do anything just by doing it. If they wanted to learn Sanskrit, they would get a textbook and go for it. It would take time and effort but the outcome would never be in doubt. Yes, of course they understand that some people are smarter than others, but they often seem not to grasp how much smarter, or what the consequences are. A large part of the population can’t learn much of anything. Not won’t. Can’t. Displaced auto workers cannot be retrained as IT professionals.
Few of the very bright have have ever had to make the unhappy calculation: Forty times a low minimum wage minus bus fare to work, rent, food, medical care, and cable. They have never had to choose between a winter coat and cable, their only entertainment. They don’t really know that many people do. Out of sight, out of mind.
Cognitive stratification has political consequences. It leads liberals to think that their client groups can go to college. It leads conservatives to think that with hard work and determination…..
The societal policies set by the able don’t necessarily work for the less able:
An economic system that works reasonably well when there are lots of simple jobs doesn’t when there aren’t. In particular, the large number of people at IQ 90 and below will increasingly be simply unnecessary. If you are, say, a decent, honest young woman of IQ 85, you probably read poorly, learn slowly and only simple things. Being promoted, or even hired, requires abilities that you do not have. This, plus high (and federally concealed) unemployment allows employers to pay you barely enough to stay alive. Here is the wondrous working of the market. …
The question arises: What does the country do with the large and growing number of people whose labor is worth nothing? Or, perhaps more accurately, whose labor isn’t needed? We see this in the cities today. An illiterate kid in Detroit has no value at all in the market for labor. Assuming that he wants to work, a questionable assumption, what then? Endlessly expanding welfare? What about the literate, averagely intelligent kid for whom there are no jobs? If people working in McDonald’s can barely live on their wages, and strike, or the state institutes a higher minimum wage, McDonald’s will automate their jobs, is automating their jobs, and conservatives will exult — the commie bastards got what they asked for.