Mark Cuban thinks that it's a great idea for people to work for free. While it may be great for Mark Cuban, it's certainly a bad idea. The notion that people should be willing to trade their time and effort (their labor) in exchange for "free" experience may sound appealing to some, but it's wrapped up in so many false myths. Basically it's just a con job.
Cuban complains that the government does not allow him to hire unpaid interns, yet the government wants people to pay for education that they may or may not have use for. On the latter point, I agree. Paying for education, or worse, getting into debt for education, when the government sits by and allows economic demand to stagnate (hence, no jobs for most students when they graduate) is basically a scam. It's a scam the government concocted to pay down our irrelevant debt. Personally, I think education should be free, because an educated citizenry "pays" for itself many times over. Can you imagine what this country would look like without such things as the G.I. Bill? But I digress.
Anyway, Cuban's wacky libertarian idea that people should work for him for free (Donatella Versace goes one better: she says that people should pay her to work for free) has a lot of false beliefs wrapped up in it. First of all, is Mark Cuban really selling anything of value? While it's true that Cuban himself is a successful businessman and entrepreneur, does he guarantee that his "employees" will have a place to work at his company or, will they find work elsewhere once their free-but-enlightening experience with him ends? If not, then they're essentially stuck in the same situation as they'd be in if they got that overvalued education, which he derides.
Where Cuban is really disingenuous, though, is when he fails to honestly state that the real reason he doesn't want to pay people is simply because paying them leaves less money for him and his enterprises. Therein lies the true nature of his proposal. Business owners see salaries and wages as costs, which leave less for their bottom lines.
In a micro sense, this may be true. That is, Cuban may indeed have less for himself and his companies if he paid people more. However, in a macro sense, this relationship breaks down. Since the total of national income equals the total of national product (everything produced), there is no "cost" to society or the economy if workers' salaries are raised. The identity states that income stays in the economy. It doesn't float out into space or disappear (maybe some is lost via imports), and more overall real wealth is created. In other words, the pie gets larger and everybody gets a bigger slice.
Here's the part that Cuban either doesn't understand or refuses to acknowledge. Profits (ostensibly what he is concerned with) equal gross sales minus the cost of goods (services) sold. So if you raise the cost by increasing salaries, but the sales rise because more people have money to buy your goods and services, then profits actually rise. In other words, you end up in the macro sense with an equal or greater result. It's mostly a greater result, because workers use nearly all of their income to consume or satisfy basic needs.
Even if income gets distributed a little differently, by paying people more, wouldn't supposedly smart entrepreneurs like Cuban have no trouble getting that larger share of income back? I'm sure that's what he would say.
Maybe the real reason Cuban opposes higher wages is because it's easier to just take the money rather than go through the trouble of competing and producing things of value to earn consumers' money. It's less work to take it and make up some wacky rationalization about how people should just work for free.
