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The Minimum Wage was established in the United States in 1938 under the administration of Franklin D. Roosevelt, and is essentially the last “New Deal” legislation to be written into law. Remember that the “New Deal” was part of the Progressive “Solution” to the Great Depression, which included the creation of Social Security and Medicare. The argument for its creation was to reduce poverty by making sure that everyone received a “Fair Wage” for their work. Of course, at the time of its passing, unemployment was already at about 19%. Some would argue that the creation of a Minimum Wage may have helped to reduce the reduce that rate, but the truth seems to be more likely connected with the beginning of World War 2, but we’ll argue that bit of history at a later date.

Remember, this was during the Great Depression. Businesses were failing. The Economy was crumbling. Our Government was spending money and increasing taxes on the Businesses and Business Owners, so Businesses were Failing. The Economy was crumbling. Our Government was spending…oh, wait a minute, I’m getting dizzy!

The New Deal was the first real “Giant Leap” toward Socialism for our country, and the population was so numb from the pain of the Great Depression that they assumed ANY act of the Government would have to be a step in the right direction. Unfortunately, by insinuating itself into the Private Business of the United States, the Government overstepped its Constitutional Bounds, and our Representatives have been too frightened to do anything about it since. In fact, the Minimum Wage has increased over the past 70+ years from $0.25 per hour to its current level of $7.25 per hour, or $15,080 per year for a 40-Hour Work Week. (For perspective, keep in mind that $0.25 in 1938 was equal to about $3.88 in 2009 Dollars. That means our CURRENT minimum wage is worth nearly DOUBLE what it started at in 1938!)

But this post isn’t really about the influence of the Minimum Wage on Unemployment. Sure, we could have the argument that every time the Minimum Wage increases, the Unemployment Rate increases as well, but what fun would that be? No, I’ve decided to take the opportunity to address something far more dangerous to the American Economy, and THAT, my Friends, is the “Maximum Wage.”

Perhaps you think that a Maximum Wage is a great idea. After all, executives at AIG received HUGE BONUS PAYMENTS in 2009, even though their company had been “bailed out” by the Federal Government. Everyone got upset and demanded action. Members of Congress threatened the executives and intimidated many into “giving the money back” to the company by threatening to TAX them at 100% if they didn’t.  (It was an empty threat, by the way. It’s illegal to do that, but that wasn’t going to stop Barney “I Sound Like Sylvester the Cat” Frank!)  Of course, the executives at Fannie Mae and Freddie Mac received the same types of compensation, but I doubt, if you blinked, you even noticed the Media Coverage of THAT! (By the way: Fannie Mae was established in the SAME YEAR as the Minimum Wage! Isn’t THAT a funny little Coincidence?!)

As a result, the Government has created a new “Special Advisor” to the President, or as Conservatives tend to call him, a “Pay Czar.” Kenneth Feinberg’s job is to decide who makes too much money, and how much they SHOULD make. The companies that will be affected right now include those companies that were “bailed out” by the Government, including Bank of America, Citigroup and General Motors, but they’ve already insinuated that this is “just a start.”

So, let me ask you a serious question: How much do you earn? (Don’t actually answer this question. It’s rhetorical. If you post your ACTUAL salary as a comment to this post, we’ll eventually delete it, but only after making fun of you for sharing with our handful of readers how much you make, you evil capitalist you.) Do you think that you make TOO MUCH? Do you think that the Government should have the right to come into your place of business, tell you that you make too much money, and cut your pay? That’s the threat that the Pay Czar has made. Sure, you may not think you’re making too much, but that doesn’t mean that the GOVERNMENT won’t.

People who earn high salaries are ALREADY being punished. Remember, the top 1% of wage earners in the country already pay about 40% of the total taxes paid every single year, and the top 10% pay the top 50% of taxes. Imagine what would happen if that top 10% suddenly had to take a pay cut. Don’t you think that would impact on the taxes received by the Government? And, since the Government is “Out of Control” on its spending, where do you think they’re going to get the money? You may not think you earn enough to be at risk, but the Government might think you earn just enough to have to become Patriotic and pay more taxes!

I remember a term from the 1970’s & 1980’s called “The Glass Ceiling.” It related the limited salary potential of individuals based upon their skin color or gender. The NEW Glass Ceiling proposed by the “Pay Czar” won’t be about skin color or gender, but will be just as prejudicial and wrong. The United States is SUPPOSED to be the land of OPPORTUNITY, but limiting salaries and punishing the successful limits that opportunity, and should be opposed by everyone…ESPECIALLY those who earn less, but want to earn MORE! Restricting how much someone can learn is more than just a Socialist philosophy: it’s downright COMMUNIST!

One last thing: What do you think gives the Government the idea that they can establish a “Maximum Wage?” If you don’t already know the answer to this, go back and re-read the first few paragraphs of this post. (Wow, I’m getting dizzy again!)

Filed under: Politics by T. Edwin Perry