Minimum Wage Hike And Why It Is A Disastrous Idea

By : Matt Winkeljohn – http://www.resistthetyranny.com

Many people hear “let’s raise minimum wage” and they get excited because that means they will make more money…right?  Not so fast.

There is much more to take in to consideration when raising the minimum wage than just “we’ll make more money.”  In fact, in many cases, that’s not true.

Let’s look past the obvious for a minute.  Minimum wage is called minimum wage because that is exactly what it is, minimum.  It is not meant to be nor has it ever meant to be a living wage.

Most people do not look beyond their pay increase when talking about minimum wage hikes.  Most people don’t see that it has adverse effects to everyone else around them and in many cases, even themselves.

Let’s look first at small businesses, which are, by far, the largest employers in the country.  Since there are too many to choose from, I will give an example of a fictional small business that fairly represents the problem with raising minimum wages.

If you are an employee of “The Shop” and are asking for more money, or in the case that America is in, the federal government demanding “The Shop” pay you more, then you need to look at the value of your work and/or the value of the product produced at “The Shop.”

A business has to make a profit in order to stay in business and to keep you employed.  If “The Shop”, like most small businesses are barely turning a profit, what do you think raising your wages to $10.10 from minimum will do?

The owner of “The Shop” will have no choice but to do one of four things.

• Fire you because he can no longer afford the number of employees he has.
• Cutting down staff means cutting down production which inevitably leads to going out of business.
• Raise the price of his product…which normally makes that price not competitive enough to stay in business.
• Close the business completely.

You may also say “well I am part of a union, I already make more than minimum wage, what do I care.”

Historically, whether union workers get paid $15 per hour or $30 per hour, when minimum wage increases, they demand theirs does too.  When their wages increases, well, look back to the four things from “The Shop.”

When talking about a national minimum wage hike you have to take in to consideration everything it takes to get a product to your door, market or store.

This means the price of flower to make the bread you buy goes up, the cost to produce the plastic bottle your water comes in goes up, the cost to ship/truck the products to the stores goes up, the stores have to then pay their employees more to stock the shelves.  At the end, who do you think pays for all these increases due to the rise in minimum wage?  The domino effect only ends at your wallet.

So sure, your paycheck may go up, but are you really making more money when the cost of everything goes up too?

All of this for less than 3% of the nation.  That is right, less than 3% of the nation makes minimum wage or less.

Then there is the fact that minimum wage, no matter how long it has been since it was raised, is right where it should be.