Sunday, November 23, 2014

The Minimum Wage & Will Muschamp

By Charles E. "Chuck" Marshall

Happy Thanksgiving, loyal readers--

Which came first, the turkey or the egg ?  Should the minimum wage be raised ?  Should there even be a minimum wage ?   The proponents say that raising the minimum wage will lift all the working class so they can afford more of the basics of life and that it will also encourage  more work and less welfare.    This increase in consumption would cause an increase in business & commerce.  The opponents say this will hurt "jobs" and that more and more businesses will have to lay off people because they can't afford the hike in salaries to their employees.  It will hurt business, raise unemployment, and make America less competitive.

 I have always been an advocate of free market principles, ie,  that the market should decide the price of goods or  the value of talents and what is the appropriate wage for each talent.  The laws of supply and demand are always superior at providing goods and services to people.   Or are they ?   A truth has recently dawned on me;  The laws of economics and the efficiency of supply and demand for the value of labor would work just fine and dandy in a perfect society.  We don't live in a perfect society.

Case in point.  The coach for my beloved Florida Gators, Will Muschamp,  has been "fired" from his position as their head coach.  Rather than getting into the details of "why" he was fired (or IF he should have been fired) I'm just going to draw some curious comparisons.    Let's say we have a human being who worked hard in a position and who has a great talent and this person was hired to fulfill a need in society the way most of us do.  In this case he coaches young men at the sport of football.    So, using the logic that since a high school football coach's salary is $45,000 per year (google search estimate), if I had just landed on earth from "planet logical" then I would assume a college football coach would make more since college is a step up.  Let's say, twice as much.  OK, College football coach should make $90k per year.  Then if he's a really good and successful football coach ?   A talented person in a specific position should be paid higher than the regular wage for such a position because they're better.  So, let's say then he'll have double the salary as his less talented peers, just to keep things nice and simple.  That makes a salary of a talented football coach at the college level  $180k.  What does Will Muschamp make ?   $3 Million dollars per year.  Now that he failed at his job, supply and demand is sending him away with $3 Million per year for 3 years for doing NOTHING.  Is he worth it?  Is Will Muschamp really 66 ($3M divided by $45k per year) times more worthwhile than your average high school football coach ?   Actually, if you take into account 3 years of being paid for doing nothing, he's really making $12M which means he's making 266 times more  than an average high school football coach.    I know there are arguments to justify all of this exorbitant pay for unique services and the glare of public scrutiny.    The same argument can be made for corporate executives and every manner of famous entertainer.  The true reality is that they're really NOT WORTH THAT MUCH !  But, society pays them anyway.  So, my point is this;  Did supply and demand come up with a logical salary for this position in society ?   No, it did not.

Back to my original subject.  The free market does not adequately compensate citizens for their efforts 'nor is it fair.  It rewards the very few, even when they fail.  Given this fact, I don't think it's such a violation of free market principles 'nor capitalist philosophy to give the working class a small raise to help them deal with the challenges of inflation and to encourage more work.  If jobs are lost, then they weren't very good jobs anyway.  Enterprises of all varieties need to compensate  their employees so that they can adequately take care of themselves in modern society for a day's hard work.   The contradiction, the gap, the inadequacy and the unfairness of paying one man doing the exact same job as another by more than 66 times and then sending him off as an even richer millionaire for his failure is a gap and an outrage that needs to be addressed and looked at by us as a society.  I nearly choke on the injustice of how people are compensated at the elite status as compared to the working middle class.  

In my humble opinion.....

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