The Minimum wage...is it minimum

Many people talk about social equality and that all men are equal. I tend to take a middle path on this. If one looks at the success of olden civilizations, it will be clear that there was an obvious social demarcation between classes of people. The Hindu society itself was divided into four classes based on their role in society, namely Brahmana ("scholarly community"), Kshatriya ("warriors or politicians community"), Vaishya ("mercantile community") and Shudra ("service providing community"). Each person in the society should have a role and they should perform that role. There is no question of equality here.

America and a few western countries are now at a stage where they are finding it hard to find people to do menial jobs. Have a visit of the Servos and convenience stores in Melbourne during the weekends you will find scores of Chinese immigrants and Asian students working there. Simple reason is that the local people do not work in such jobs. So is the case with America. America is facing a problem with illegal immigrants from Mexico. The argument in favour of the illegal immigrants is that they form a fabric of America and they are ready to do the menial jobs Americans don’t want to do and better they will do it for half the pay.

It is widely argued (at least in some quarters) that increasing the minimum wage is critical to an economy thus bringing social equality. I tend to disagree on that. I bought a wrist watch (no prizes for guessing where it was made from) from Kmart. It cost be $7.50. I tried hard to get it adjusted to my size by removing a couple of (I don’t know what you call them, you know the chain type of thing) plates I guess. I could not and then I took it to the watch repairer whom you find in the middle of the aisle in shopping malls. You won’t believe it; he quoted $22.50 to do it. It is ridiculous. But lets wait for a minute and think rationally why is he charging that much. Well, my theory is that the worker will be paid at least $20 per hour as a consequence of the minimum wage and his skill. Know you can work the math and add margin, cost of rent etc., and figure out whey I was charged that much.

Another example, when I was studying I had to change the muffler on my Apollo Holder. It cost me $40 for a second hand muffler and $60 to refit. It was a 45 minute job.

I cannot see this happening in any of the developed countries, because we have no minimum wages and we always have another person do it for cheaper. On the other hand in western countries irrespective of what service you require you will find the price more or less the same and they will not budge on the price.

The point I am trying to get at is there should be no minimum wage the invisible hands of supply and demand should determine that. I do hope India does not tread the path of minimum wages.

Disclaimer: I am not an economist and I do not claim that my theory is fool proof. I welcome comments and criticisms.