The False Allure of the Minimum Wage
If you follow politics closely you notice that increasing the minimum wage is one of the premier goals of the Democratic Party. To a certain extent that is logical. The Democratic Party insists it is the political party that believes in helping the poor and the downtrodden and it claims that conservatives who oppose increasing the minimum wage are mean-spirited and want to keep the poor in poverty. However, like many issues, the truth is more complicated and like the majority of Democratic policy recommendations, raising the minimum wage ends up hurting those it intends to help.
Liberals argue that increasing the minimum wage will force corporations and businesses to increase the take-home pay of the poorest Americans. They contend that passing state or federal laws mandating a higher minimum wage will allow the poor to leave the clutches of poverty. But if passing a law is all it takes, why stop there? Why not raise the minimum wage to $10 an hour? For that matter, why not raise it to $50 an hour, assuring every working person a very comfortable living? Or even better, why not raise the minimum wage to $500 an hour and make everyone a millionaire?
What would really happen if the minimum wage was $500 an hour? No one would hire anyone. Businesses would not be able to accumulate enough of a profit to make their employees millionaires because the employees' time is not worth $500 an hour. The same logic applies to mandating a minimum wage of $5.15, which is the current federal minimum wage. If your labor is worth only $3 an hour because you have no work experience, education, or valuable skills then businesses will simply not hire you because it would be illegal to do so.
The alternative would be to hire you for the minimum wage and give you, in the form of charity, the extra $2.15. There is nothing wrong with charity but the vast majority of businesses cannot afford to engage in charity. So instead of being able to work a job for $3 an hour, learn a skill, and increase your wages over time, you simply become unemployable. The first rung of the ladder is gone, and there is no place to start. This will be the case nationwide so overall unemployment and poverty will rise. This phenomenon becomes clear when you consider the fact that teenagers are the greatest unemployed group. Their skills do not justify a wage below the minimum and so few jobs exist for them.
High minimum wage policies are being attempted in large parts of Western Europe with devastating results. The French minimum wage is 8.03 (EUR) per hour or $10.15 an hour in U.S. dollars. This is about twice America's federal minimum wage, and the result has not been greater prosperity. The unemployment rate in France, as well as in all of Western Europe, is about 9.5%, twice the American rate. The high minimum wage is preventing companies from hiring low skilled workers because their time is not worth $10.15 an hour. As a result, unemployment for young, low skilled workers is close to 40%. The reason France experienced a nationwide riot in 2005 was due, in part, to the fact that the majority of the poor simply could not, and still cannot, find work.
In reality, minimum wage employees usually do not earn the minimum wage for an extended period of time. As they build their job skills and prove their worth and reliability, their pay increases. Of minimum wage earners, over 60% receive raises in their first year of employment. But by pricing unskilled labor out of entry-level jobs through a mandated minimum wage the raises will not be realized because the jobs will not exist in the first place.
The number one way to get a poor person out of poverty is to get them a job. Entry-level jobs allow the poor to get a foothold in life. Therefore, it is puzzling why one of the major political parties in America insists on a law that eliminates job opportunities for the poorest Americans. Many reasons contribute to the insistence by liberals to increase the minimum wage. Liberals are allied with labor unions whose wages increase every time the federal minimum wage goes up and liberals also like to paint conservatives as evil people who want to punish the poor.
However, liberals support minimum wage increases mainly because they believe that any problem can be solved by the government. Conservatives understand that the most of the time government is the problem, not the solution. If liberals really wanted to help the poor, they would repeal the minimum wage mandates and let free-market capitalism work its magic.
Any comments or questions can be received at whyyouareaconservative@gmail.com
~ The Conservative Guy
Liberals argue that increasing the minimum wage will force corporations and businesses to increase the take-home pay of the poorest Americans. They contend that passing state or federal laws mandating a higher minimum wage will allow the poor to leave the clutches of poverty. But if passing a law is all it takes, why stop there? Why not raise the minimum wage to $10 an hour? For that matter, why not raise it to $50 an hour, assuring every working person a very comfortable living? Or even better, why not raise the minimum wage to $500 an hour and make everyone a millionaire?
What would really happen if the minimum wage was $500 an hour? No one would hire anyone. Businesses would not be able to accumulate enough of a profit to make their employees millionaires because the employees' time is not worth $500 an hour. The same logic applies to mandating a minimum wage of $5.15, which is the current federal minimum wage. If your labor is worth only $3 an hour because you have no work experience, education, or valuable skills then businesses will simply not hire you because it would be illegal to do so.
The alternative would be to hire you for the minimum wage and give you, in the form of charity, the extra $2.15. There is nothing wrong with charity but the vast majority of businesses cannot afford to engage in charity. So instead of being able to work a job for $3 an hour, learn a skill, and increase your wages over time, you simply become unemployable. The first rung of the ladder is gone, and there is no place to start. This will be the case nationwide so overall unemployment and poverty will rise. This phenomenon becomes clear when you consider the fact that teenagers are the greatest unemployed group. Their skills do not justify a wage below the minimum and so few jobs exist for them.
High minimum wage policies are being attempted in large parts of Western Europe with devastating results. The French minimum wage is 8.03 (EUR) per hour or $10.15 an hour in U.S. dollars. This is about twice America's federal minimum wage, and the result has not been greater prosperity. The unemployment rate in France, as well as in all of Western Europe, is about 9.5%, twice the American rate. The high minimum wage is preventing companies from hiring low skilled workers because their time is not worth $10.15 an hour. As a result, unemployment for young, low skilled workers is close to 40%. The reason France experienced a nationwide riot in 2005 was due, in part, to the fact that the majority of the poor simply could not, and still cannot, find work.
In reality, minimum wage employees usually do not earn the minimum wage for an extended period of time. As they build their job skills and prove their worth and reliability, their pay increases. Of minimum wage earners, over 60% receive raises in their first year of employment. But by pricing unskilled labor out of entry-level jobs through a mandated minimum wage the raises will not be realized because the jobs will not exist in the first place.
The number one way to get a poor person out of poverty is to get them a job. Entry-level jobs allow the poor to get a foothold in life. Therefore, it is puzzling why one of the major political parties in America insists on a law that eliminates job opportunities for the poorest Americans. Many reasons contribute to the insistence by liberals to increase the minimum wage. Liberals are allied with labor unions whose wages increase every time the federal minimum wage goes up and liberals also like to paint conservatives as evil people who want to punish the poor.
However, liberals support minimum wage increases mainly because they believe that any problem can be solved by the government. Conservatives understand that the most of the time government is the problem, not the solution. If liberals really wanted to help the poor, they would repeal the minimum wage mandates and let free-market capitalism work its magic.
Any comments or questions can be received at whyyouareaconservative@gmail.com
~ The Conservative Guy
posted by The Conservative Guy at
4:24 PM
4 Comments:
I've seen American capitalism working its magic with no increase in the minimum wage. Poverty rate up. Quality of life down for the poor. Get out of your books and look out on the street.
The real question is whether you think you could live on the minimum wage.
By
Marshall Darts, at 10:40 PM
Just because you say the poverty rate is up and the quality of life is down for the poor, doesn't make it true. When I'm out on the street I see helped wanted signs all around. Many opportunities exist, but in today's world you have to develop a skill to get out of poverty. You can't do that without a job and the minimum wage eliminates the entry-level jobs that poor, low-skilled workers need the most. I most definitely could live on the minimum wage, but after I developed a skill I would not be paid the minimum wage for long. Free-market capitalism has made America's poor richer than most humans alive today. It may make you feel good to support mandated minimum wages, but that policy hurts the very people you think you are helping.
By
The Conservative Guy, at 10:17 AM
The most common health problem among poor Americans today is not that they do not have enough food to eat, but that many are overweight. Food has become so cheap in America because businesses compete to sell the most food at the lowest price. This is capitalism at its finest. The United States is the most economically successful country in the world because it is a capitalistic nation and doesn't, in general, embrace socialist ideals like high minimum wages that eliminate the jobs the poor need the most. Also, comparing my position to slavery is ridiculous, but, as I said in the initial post, liberals like you have to paint conservatives as wanting to hurt the poor, even though liberal programs never help the poor get out of poverty.
By
The Conservative Guy, at 6:32 PM
The "real question" is not whether one can or cannot live on minimum wage. A person whose skills do not warrant his being paid minimum wage will not live on minimum wage. That person will live on taxpayer money, because that person will not be employed.
Of course liberals would prefer increases in the minimum wage... instead of encouraging a perfectly employable individual to fully develop and improve a skill for his own personal advancement, an increased mandatory minimum wage (or arguably any minimum wage, for that matter) will often times keep a perfectly employable person at home watching episodes of Springer while living off the taxpayers' nickel. Like TCG pointed out, a company is simply not going start out paying an individual what that individual is not worth (yet). Unfortunately companies just can't afford to do that, and must cope with this type of additional government regulation by keeping its best workers and cutting its weakest. (Instead of starting out paying the weakest what that employee is worth to the company, while over time increasing pay as the employee adds value.)
So looking at the big picture it's smart for liberals to urge increases in the minimum wage. For each of those individuals who is left without a job for the reasons discussed by TCG, that is another guaranteed vote for the Democrats. Keep those handouts flowing.
By
WC44, at 1:44 AM
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