Sunday, October 8, 2017

Is Raising the Minimum Wage Good or Bad for the Economy?

There has been an organized effort on the part of unions and the liberals (a/k/a Democrats and Progressives), to raise the minimum wage nationally to $15.00 per hour. Is that proposal good economic policy or is it a disaster for the working poor who are now working for the minimum wage?

The intentions of raising the pay for workers is admirable, but the negative economic consequences of instituting a $15.00 minimum wage, by government mandate, is apparent for anyone who has any kind of rational economic sense.

Instead of boosting the supposed working poor (e.g. teens, immigrants, the unskilled and seniors working to supplement their retirement), the boost has actually eliminated jobs and has locked many of the unskilled workers out of the job market. Basic economics predicts that by increasing the minimum wage to $15.00 per hour, it will never work, and it actually hurts the unskilled workers for which the increase was intended to improve their economic condition.

Arbitrarily mandating pay levels in excess of the value of the work performed, actually locks out many in the work force and denies them the opportunity to gain on-the-job experience that they need to qualify for more skilled, higher paying jobs. It has been determined, in the real world, that a person doesn't get paid for the time he/she works, they get paid for the value they bring to the time they work.

Well, what has happened in some of the cities where the minimum wage was arbitrarily raised (or will be raised to $15.00 incrementally). The cities of Seattle and San Francisco have raised their minimum wage, so what has been their experience? In the City of San Francisco, the minimum wage increase has led to a rash of restaurant closings due to the increased labor costs mandated upon the owners of these restaurants by the city. It seems that many of the legislators in California are blinded to the facts by their liberal ideology by not recognizing the negative “benefits” of raising the minimum wage. In fact, House Democrat Minority Leader, Nancy Pelosi, from the San Francisco area, has stated that if the Democrats retake the House of Representatives in 2018, they will raise the federal minimum wage rate to $15.00 per hour in the first 100 days.

In Seattle, it's the same story. A study by the University of Washington has shown that increasing the minimum wage has hurt low wage Seattle workers. Workers are taking home $125.00 less per month due to cutbacks in hours totaling up to 3.5 million hours per calendar quarter, and in addition, many small businesses have shut their doors and have gone out of business leaving many workers unemployed.

How will employers try to meet the increased costs of payroll on their businesses? Adding “unproductive” costs on them forces them to look at other options in order to survive and remain financially efficient. Those options have included, raising prices (a real negative in many cases), closing their doors and going out of business (another negative), using robots, installing self-service kiosks, cutting back employee hours, or actually laying off workers. Most of those options are not good for the working poor or for our economy in general.

In conclusion, the proverb, “The Road to Hell is Paved With Good Intentions”, seems to apply to the advocates and proponents of raising the minimum wage to $15.00 per hour. The “workers” who are protesting various businesses to have that business pay the $15.00, in most cases, are protesting for their own unemployment. Remember, to these protesters, isn't it better to be employed, at say $8.00 per hour, than be unemployed at $15.00 per hour? For that is the consequences of this liberal “feel good” proposal to raise the minimum wage. It's time to cut our losses and realize that the only effective way to raise wages and create upward mobility, instead of government mandates, is through increased demand, by a vibrant, growing economy. The Pres. Trump tax plan is one way of achieving that positive result.

Conservative commentary by Chuck Lehmann

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Art Hein said...

If the liberal economic ignoramuses think that a $15.00 minimum wage is the way to go, why not $30.00 per hour? Wouldn't that be twice as good? You know you couldn't justify that and I'm sure you realize that even $15.00 for someone doing unskilled work is more than the market will bear. What about a person now earning $15.00 per hour, wouldn't he/she want a comparable raise and so on up the line? See, it's not so easy to just use emotion to screw up an economic system or a company's payroll, when you try to garner votes by trying to give goodies to people without an increase in production. That's Economics 101, which it seems most liberals never took that course in school, instead they probably took a ethnic studies or a women's liberation social class? If the liberals were twice as smart as they are now they'd still be stupid.

Gary Goldstein said...

I'd like to ask these liberal economic illiterates, is a low-skilled, inexperienced worker better off working at a job for $8.00 per hour than to be unemployed at $15.00 per hour? The minimum wage does not increase any individuals value to an employer. It does not guarantee employment, it only eliminates employment that would have otherwise occurred had that artificial wage floor not been there. These protesters for a $15.00 minimum wage are actually protesting themselves out of meaningful employment. it's like cutting off your nose to spite your face.