Minimum Wage

I know this is not a very interesting topic. In fact, for some of you, this will be completely and utterly boring. But, this is one of the issues that Democrats are eager to push through Congress. So, I must talk about it.

The minimum wage was enacted in the United States in 1933. But, just a couple of years later, the Congress decided that the minimum wage was unconstitutional and repealed it. However, it was reinstated in 1938 under the Fair Labor Standards Act.

So, why do we have a minimum wage? Obviously, the main reason is to protect low-skilled employees from being treated unfairly by employers. Whether or not our government should be in the business of coming between an employer and employee to negotiate wages is a moot point. The minimum wage is here to stay. The real issue becomes, "Should we raise the minimum wage?".

Why would we want to raise it? Some feel that it is unreasonable to expect anyone to raise a family on $5.15/hr. (the current minimum wage). But, I'll discuss that in a minute.

The second reason politicians want to raise the minimum wage doesn't get talked about much. It is so the government can have a niche with labor unions and buy votes from low-income workers. When a politician promises to use the force of government to lean on private employers and put more money in the pockets of employees, this results in votes. There is no denying it. It is simple class warfare.

So, politicians use the minimum wage as a way to increase their own power. Oh, they disguise it as "looking out for the common man," and "standing up for the poor." But, make no mistake. Their first and foremost goal is their own re-election.

Am I being to harsh? Am I misreading the situation? Maybe they really are just trying to "stand up for the poor." Well, let's see.

One of the main arguments against raising the minimum is that it will increase unemployment. If employers are forced to pay employees more, there is less cash flow for the full workforce. Therefore, layoffs ensue. There have been countless studies to back this up. But, we'll look at one in particular.

In 1995, the Congress completed a study of the effects of the minimum wage on employment. I know the study is over 10 years old. But, it was a study of 50 years worth of wage and employment statistics. So, it is still quite valid. Here is what they found:

• The minimum wage reduces employment.
• The minimum wage reduces employment most among black teenage males.
• The minimum wage hurts the unskilled.
• The minimum wage hurts low wage workers.
• The minimum wage increases job turnover.
• The minimum wage reduces employment in low-wage industries, such as retailing.
• The minimum wage hurts small businesses generally.
• The minimum wage has long-term effects on skills and lifetime earnings.
• The minimum wage leads employers to cut back on fringe benefits.
• The minimum wage hurts low-wage regions, such as the South and rural areas.
• The minimum wage increases the number of people on welfare.
• The minimum wage hurts the poor generally.
• The minimum wage does little to reduce poverty.
• The minimum wage helps unions.

As you can see, the findings do not favor the minimum wage, much less an increase. You can also see that the “standing up for the poor” argument is a load of crap. Increases in the minimum wage hurt the poor. Not only are the jobs for low-skilled workers cut. But, retail prices go up to accommodate the increase in employee wages. So, the poor are out of work and paying more for their day to day items. Way to “stand up for the poor.”

The fact that an increase in the minimum wage increases unemployment rates has been argued to death. Proponents for increasing the minimum wage will continue to stick their fingers in their ears and ignore studies like this one.

So, is there another reason that we should not raise the minimum wage? This is where I get to be really insensitive.

We should not encourage people to live at that level! People say that you can’t raise a family on $5.15 an hour. You’re right. So, acquire better job skills, educate yourself, and get a better paying job! Minimum wage jobs are meant for teenagers who have limited or no job skills, and are moving into the workforce for the very first time. It is not for a 30 year old woman with 5 children who has been at the same job skill level for 10 years. Making it more profitable to remain at that level only encourages people to be underachievers. Encourage them to strive for more.

People must take responsibility for their own achievements or lack thereof. The government must not be allowed to use force to protect us from our own bad decision-making. That is called freedom.


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