I am always under the assumption that more is better in the case of normal goods. By extension, that would mean anybody rational would love money, which is really a normal good. A stranger yesterday tried to shatter my worldview but I believe my worldview just shattered the stranger’s hope.
I was committing the sin of pumping gas in the evening right after work when I was approached by a person soliciting for donation for the special children. I do not usually entertain solicitation but I had volunteer for such work in the past for environmental purposes. I cannot help but felt some empathy for the person and I decided to listen.
As a very skeptical but empathetic man, I tried to hide my frown with a weak smile. I doubt such effort was successful but I listened carefully nonetheless. After all the icings, she finally came to the point: donate at least ten bucks to be free of yourself from guilt.
I decided to throw away my skepticism and for once, maybe, do a little good for the society. I assumed that this was not a scam and I assumed almost the whole sum of the donation collected would go to the children. I might be assuming too much but I wanted to do some good. I want to be naïve. So, “Okay, just give her the ten bucks and shoo her off so that I could continue on to the Bar Council in Kuala Lumpur for a forum.
While I was searching for that ten ringgit note inside my wallet, I spotted a five ringgit note amid the 50s and the 10s and the 1s. At the very last moment, my weird mind started to take a radical centrist stance. My altruist self wanted to donate ten bucks while my skeptical part would love to shove the pamphlet up her your know what. For a moment, a war erupted, egos were hurt and the two parties decided to make peace and agree to take an average between nothing and ten ringgit.
“I’ll give you five.”
To my surprise, the person, she, rejected five and requested for ten. That is the first time in my life somebody actually solicits for donation rejected an offer and said that it is not enough.
“What?” I said, incredulously.
She later explained that the receipts for the donation are pre-printed and the lower domination is ten. Therefore, she would not be able to issue a receipt for me if I donated anything less.
I was about to say, no, I do not need a receipt but at this time, the skeptical part of me ruled supreme and decided to squash the altruism though and through. The libertarian in me joined the skeptic when I realized that is a price floor. And so, I said politely, “If there is the case, then I apologize. I don’t have any to give.”
I could feel the skeptical part of me smirking, valiantly victorious over the altruist. I felt sorry for her later but I hope she realized how impractical that policy is. I do not blame her really because she does not design the policy. Nevertheless, the policy prevents the fund from receiving more contribution. Perhaps, I have taught her a greater lesson in economics than merely 10 bucks. The libertarian and the economist consoled the altruist, trying to convince the latter that we have done greater good to the society by demonstrating how price floor deprives opportunities.
The price floor just is not a good policy, at least, in its current modus operandi of volunteers running around at public spaces soliciting for donation from strangers on the sidewalk. Or gas station. The organization that runs the donation drive has to find a better way to issue receipts.
The same goes with minimum wage. It is counterproductive.
2 replies on “[1275] Of price floor and donation”
Minimum wage is a tool, yes but it is not the only too and is not the best. If we want to increase the welfare of the people, the better way is to help increase their productivity. The clearest way towards such goal is greater education level.
If we have 1.5 million low cost worker, is that really a bad thing?
Besides, the taxpayer has to bare the consequence of minimum wages too. One of those consequences is more widespread unemployment. Another is inefficiency. Minimum wage, if it is above equilibrium price, is never efficient.
But how does currency outflow is relevant to low cost worker?
Japan protects its farmer though the same way Malaysia protects Proton. It practically protects inefficient industry. So,
And minimum wage will keep out labor inside?
Well, there will be no job for many of these labors if a minimum wage. It increases cost of business and business do not have unlimited resources. So, they’d have to go out to, wouldn’t they?
Let the market decides on the wages because wages will automatically rise if there is a lack of/great demand for good talents in the economy.
IMHO, minimum wages are indeed a tools, both carrots and stick to move the society. In facts, all labor field are affected. But don’t forget that Malaysia has 1.5 millions low cost foreign worker. There is a huge society cost that tax payer must bare for its consequences. E.g. outflow currency, medicals benefit ,low efficiency,etc. It does affect those labor intensive field. But don’t forget, Farmer in Japan, Taiwan has take same way to achieve the premium status as compare to other 3rd world country cheap labor output.
It will be too late when “our” cheap labor start flowing to other country with higher wages.