Central planners and politicians have no clue when it comes to creating
wealth. They are incapable of creating growth and a productive economy,
despite what they would have you believe.
The government cares about one thing above all else: expanding itself and
its power. One of the methods in which they have done this through history,
up until the point in which it becomes so bloated it implodes on itself, is
through the expansion of social welfare programs.
In the West, a large portion of the population now finds itself stuck in
this very cycle, the social welfare cycle, which is the doom of all
established economies – the cycle of "why should I work if I can make
more money sitting at home?"
The logic is sound; you can't entirely blame those for thinking this way,
as it is only human nature to take the easy way out, no matter the cost to
our future or the wellbeing of generations down the road.
The biggest challenge for government is how to expand this dependant
class, while making it seem to the rest of us (who support the welfare class)
that this is not their intention. One stealth method of achieving this end
goal is through the nefarious "minimum wage."
To the naked eye, minimum wage is a great thing. Yet to those of us who
are awake and understand basic economics, we know that this has been one of
the great blights in the West and has hollowed out our manufacturing base and
shipped untold jobs overseas.
Minimum wage forces companies, such as McDonald’s, to come up with newer
and newer solutions to replace humans in the work force, pricing people out,
as politicians raise the bar ever higher, making it less and less feasible to
hire people to do jobs. It becomes cheaper and cheaper to replace workers
with machines.
In some cases this has led to great innovations, yet in others it has been
a great detriment to mankind, putting many out of the workforce and causing
vast poverty in many sectors where there was once untold wealth.
This "pricing out" of mankind is happening in many industries,
with McDonald’s, for example, making it very clear that they will be
replacing much of their workforce with machinery as the minimum wage price goes
up. This will add no increase in service to the customer, but will place much
more stress on our already fragile system.
I have seen this first-hand. In Canada there are numerous "self-checkout" McDonald’s kiosks, where only one
staff member can be seen on the front line, and the rest are represented by
machines with which you fill out and pay for your own order, interacting with
barely anyone during your experience there.
This is the way of the future, as politicians continue their war on the
working class, while "acting" like our saviors and demanding a
raise in the minimum wage. A raise – as anyone who understands economics 101
will understand – that will not bring more prosperity, but only inflation,
wealth destruction, and misery. Good job, mission accomplished.
The views and opinions expressed in this material are those of the author
as of the publication date, are subject to change and may not necessarily
reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the
accuracy, completeness, timeliness and reliability of the information or any
results from its use.