I saw a great observation this morning by King Banaian, a former Minnesota state legislator and now a Professor of Economics at St. Cloud University, about the minimum wage. Banaian reminds us that for the self-employed, the minimum wage is zero.
Zero!
Shouldn’t someone tell Barack Obama? How do these poor self-employed people live when the minimum wage is zero! You can’t raise a family making zero!
Of course, this is where you see how absurd minimum wage laws are. The self-employed understand what you have to put into a business relationship with another party if you want to make a living. For the self-employed, there is no union to negotiate on your behalf. There is no congressman to force your clients to pay you more for your services.
For the self-employed, there is only one thing that gets you paid, and that’s when you produce. When you deliver. When the value you bring to your clients or customers represents enough of what they want, they will pay you what you want in return. Successful self-employed people understand that dynamic, and operate according to that principle every day.
What Democrats do not understand – and to be fair, many Republicans, and just about all of the news media do not understand – is that all employment agreements really work this way. The only reason that company pays you at all is that you can produce something that delivers value back to the company. They don’t hire you just because they can afford it and you need a job. They hire you because you can deliver value to them that makes their cost of employing you worth it. Employees who understand this don’t have to depend on minimum wage laws. They make far more than that because they’re worth far more than that.
If you can’t even get your employer to pay you $9 an hour unless the government forces them, what you need to do is not complain to your congressman or the president. You need to figure out how to deliver more value. Ask any self-employed person. They know. Because as King Banaian points out, for them the minimum wage is zero. They have to make every penny they earn worth it to the people who are paying them. Just like you should.
