2021 Leg Session, Business/Economy, Columnists, Constitutional Law, Gold Dome, Jon Caldara, Politics

Caldara: Constitutional minimum wage a looming inflation trap

Now is the time to remove the state’s minimum wage mandate from the Colorado Constitution before it can do massive damage.

Mind you, I find the idea of a minimum wage to be immoral and ugly, as I’ll explain in a moment. But I’m arguing we need to move this mandate out of the Constitution and, assuming we have to keep it at all, just put it into state statute. And do it this year.

Statutes can be changed by the legislature and governor anytime. State constitutional changes are slow, difficult and must be brought to the people for approval. The Constitution by design is hard to change.

Our current constitutional mandate raises the minimum wage every year by the rate of inflation. This sure sounds swell, guaranteeing minimum-wage workers will at the very least keep up with the “cost of living.”

Sadly, most Americans don’t remember inflation. Heck I don’t even really remember it. Back in the 1970’s when price inflation was destroying lives, it was my dad’s problem. I had more pressing matters, like girls. So, why bring up the issue now?

We forget how quickly inflation can start and how easily it can run out of control. There are many signals that, despite what drivel the Federal Reserve tries to placate us with, inflation could come galloping back as early as this year.

While there is a multitude of factors leading to price inflation, the major one is the printing of money by the Federal Reserve and the velocity of that money running through the economy.

The Fed has been pumping made-up money into the system for decades, making inflation likely inevitable. But the money-printing orgy around COVID is like nothing any American alive has ever seen.

Trillions upon trillions of dollars were made out of thin air in 2020. And now with a President Biden and Democrats in control of both chambers of Congress, more is certain. Look for $2,000-per-person stimulus checks and massive bailouts for states coming soon, just as the economy starts to heat up post-pandemic. (Made-up money + velocity from a growing economy = price inflation)

So, what does that have to do with Colorado’s minimum wage? Well, as proved in the 1970’s, high inflation and high unemployment can join together, and both accelerate. Stagflation.

If (and it is an “if”) inflation explodes, by our constitutional mandate Colorado’s minimum wage jolts up with it. As wages skyrocket, fewer employers can afford to hire workers — and unemployment goes up.

Colorado could find itself in a situation where folks are desperate for a job, but because of the constitutional mandate, no one can afford to hire them.

Imagine a $20, then $30, then $50 minimum wage. There might be tons of folks willing to work for far less, but the state constitution makes that a crime. It could spiral out of control.

The simple way to prevent that is to move the mandate from the Constitution to statute. It changes nothing in practice but IF this inflation/unemployment scenario happens, legislators would have the authority to fix it.

The legislature should, this year, place this reform on this November’s ballot.

A full constitutional repeal of the minimum wage would be better but politically impossible now.

The minimum wage is hateful and bigoted.

Laws that keep consenting people from having a voluntary relationship of their choosing are simply morally abhorrent. Money isn’t the only factor in taking a job. People choose voluntary relationships, like employment, for uncountable reasons.

Let’s take two hypothetical neighbors. Ginger is building her home-based accounting company. Maryanne is her stay-at-home neighbor with children finally entering school, meaning she finally has some time to devote to developing a new professional skill. Ginger can afford, say, only $5 an hour for the help she absolutely needs to grow her fledgling business. Maryanne wants to learn accounting, and for her a flexible schedule and no work commute are more important than a higher wage. This is a perfect fit!

Now keep in mind if Ginger and Marianne wanted to have a lesbian relationship or a same-sex marriage, the law rightly protects their wishes to have those relationships.

But if they want to have an employer/employee relationship, well, that’s too perverse for the law to allow.

Apparently, leftists only support consensual relationships when people are naked.

Jon Caldara is president of the Independence Institute, a free market think tank in Denver.


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