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Saturday, May 11, 2013

Benjamin Franklin on the Minimum Wage

I've always thought of Ben Franklin as the playboy founding farther based on all the stories from Paris as well as his letter about older women:

Advice to a Friend on Choosing a Mistress

Wiki Background

Of course I'm aware of all his science, political and pithy writings but I didn't realize what a Libertarian he was.  I'm especially impressed with his economic understanding and foresight in this particular piece:

On the Labouring Poor

by Benjamin Franklin, posted on April 1, 1768

SIR, I have met with much invective in the papers for these two years past, against the hard-heartedness of the rich, and much complaint of the great oppressions suffered in this country by the labouring poor. Will you admit a word or two on the other side of the question? I do not propose to be an advocate for oppression, or oppressors. But when I see that the poor are by such writings exasperated against the rich, and excited to insurrections, by which much mischief is done, and some forfeit their lives, I could wish the true state of things were better understood, the poor not made by these busy writers more uneasy and unhappy than their situation subjects them to be, and the nation not brought into disrepute among foreigners by public groundless accusations of ourselves, as if the rich in England had no compassion for the poor, and Englishmen wanted common humanity.

In justice then to this country, give me leave to remark, that the condition of the poor here is by far the best in Europe, for that, except in England and her American colonies, there is not in any country of the known world, not even in Scotland or Ireland, a provision by law to enforce a support of the poor. Every where else necessity reduces to beggary. This law was not made by the poor. The legislators were men of fortune. By that act they voluntarily subjected their own estates, and the estates of all others, to the payment of a tax for the maintenance of the poor, incumbering those estates with a kind of rent charge for that purpose, whereby the poor are vested with an inheritance, as it were, in all the estates of the rich. I wish they were benefited by this generous provision in any degree equal to the good intention with which it was made, and is continued: But I fear the giving mankind a dependance on any thing for support in age or sickness, besides industry and frugality during youth and health, tends to flatter our natural indolence, to encourage idleness and prodigality, and thereby to promote and increase poverty, the very evil it was intended to cure; thus multiplying beggars, instead of diminishing them.

Besides this tax, which the rich in England have subjected themselves to in behalf of the poor, amounting in some places to five or six shillings in the pound of the annual income, they have, by donations and subscriptions, erected numerous schools in various parts of the kingdom, for educating gratis the children of the poor in reading and writing, and in many of those schools the children are also fed and cloathed. They have erected hospitals, at an immense expence, for the reception and cure of the sick, the lame, the wounded, and the insane poor, for lying-in women, and deserted children. They are also continually contributing towards making up losses occasioned by fire, by storms, or by floods, and to relieve the poor in severe seasons of frost, in times of scarcity, &c. in which benevolent and charitable contributions no nation exceeds us. — Surely there is some gratitude due for so many instances of goodness!

Add to this, all the laws made to discourage foreign manufactures, by laying heavy duties on them, or totally prohibiting them, whereby the rich are obliged to pay much higher prices for what they wear and consume, than if the trade was open: These are so many laws for the support of our labouring poor, made by the rich, and continued at their expence; all the difference of price between our own and foreign commodities, being so much given by our rich to our poor; who would indeed be enabled by it to get by degrees above poverty, if they did not, as too generally they do, consider every increase of wages only as something that enables them to drink more and work less; so that their distress in sickness, age, or times of scarcity, continues to be the same as if such laws had never been made in their favour.

Much malignant censure have some writers bestowed upon the rich for their luxury and expensive living, while the poor are starving, &c. not considering that what the rich expend, the labouring poor receive in payment for their labour. It may seem a paradox if I should assert, that our labouring poor do in every year receive the whole revenue of the nation; I mean not only the public revenue, but also the revenue, or clear income, of all private estates, or a sum equivalent to the whole. In support of this position I reason thus. The rich do not work for one another. Their habitations, furniture, cloathing, carriages, food, ornaments, and every thing in short that they, or their families use and consume, is the work or produce of the labouring poor, who are, and must be, continually paid for their labour in producing the same. In these payments the revenues of private estates are expended, for most people live up to their incomes. In cloathing and provision for troops, in arms, ammunition, ships, tents, carriages, &c. &c. (every particular the produce of labour) much of the publick revenue is expended. The pay of officers civil and military, and of the private soldiers and sailors, requires the rest; and they spend that also in paying for what is produced by the labouring poor. I allow that some estates may increase by the owners spending less than their income; but then I conceive that other estates do at the same time diminish, by the owner’s spending more than their income, so that when the enriched want to buy more land, they easily find lands in the hands of the impoverished, whose necessities oblige them to sell; and thus this difference is equalled. I allow also, that part of the expence of the rich is in foreign produce or manufactures, for producing which the labouring poor of other nations must be paid; but then I say, that we must first pay our own labouring poor for an equal quantity of our manufactures or produce, to exchange for those foreign productions, or we must pay for them in money, which money, not being the natural produce of our country, must first be purchased from abroad, by sending out its value in the produce or manufactures of this country, for which manufactures our labouring poor are to be paid. And indeed if we did not export more than we import, we could have no money at all. I allow farther, that there are middle men, who make a profit, and even get estates, by purchasing the labour of the poor and selling it at advanced prices to the rich; but then they cannot enjoy that profit or the incomes of estates, but by spending them in employing and paying our labouring poor, in some shape or other, for the products of industry — Even beggars, pensioners, hospitals, and all that are supported by charity, spend their incomes in the same manner. So that finally, as I said at first, our labouring poor receive annually the whole of the clear revenues of the nation, and from us they can have no more.

If it be said that their wages are too low, and that they ought to be better paid for their labour, I heartily wish any means could be fallen upon to do it, consistent with their interest and happiness; but as the cheapness of other things is owing to the plenty of those things, so the cheapness of labour is, in most cases, owing to the multitude of labourers, and to their underworking one another in order to obtain employment. How is this to be remedied? A law might be made to raise their wages; but if our manufactures are too dear, they will not vend abroad, and all that part of employment will fail, unless by fighting and conquering we compel other nations to buy our goods, whether they will or no, which some have been mad enough at times to propose. Among ourselves, unless we give our working people less employment, how can we, for what they do, pay them higher than we do? Out of what fund is the additional price of labour to be paid, when all our present incomes are, as it were, mortgaged to them? Should they get higher wages, would that make them less poor, if in consequence they worked fewer days of the week proportionably? I have said a law might be made to raise their wages; but I doubt much whether it could be executed to any purpose, unless another law, now indeed almost obsolete, could at the same time be revived and enforced; a law, I mean, that many have often heard and repeated, but few have ever duly considered. SIX days shalt thou labour. This is as positive a part of the commandment as that which says, the SEVENTH day thou shalt rest; but we remember well to observe the indulgent part, and never think of the other. St Monday is generally as duly kept by our working people as Sunday; the only difference is, that, instead of employing their time, cheaply, at church, they are wasting it expensively at the alehouse. I am, Sir, &c. MEDIUS.

Gentleman’s Magazine, April, 1768