As one of its first acts, the House of Representatives voted to increase the minimum wage to $7.25 per hour. Personally, I say why stop there? Why not raise it to $20 an hour, that would really help everyone out. Or how about $50 per hour?
Anyway, thanks Congress. Thanks for doing this for the massive portion (1.3%) of American workers that actually earn the minimum wage, 1 in 16 of whom are over the age of 18. Thanks for helping out all those poor, desparate high-school kids in the suburbs who work at Abercrombie and the Gap. Thanks for making it harder for low-skilled workers to find entry-level jobs.
It all sounds so good, and it feels so good. Keep at it.
7 comments:
Not to mention all the union workers who should thank them because their wages are tied directly to a pay scale based on the minimum wage. They just got an automatic raise that their employers will have to figure out how to pay for. Where will they get the money? Out of the consumers' pockets with higher prices.
So Joe Snuffy Jenkins dropout may be making $2 more an hour, but he won't be able to pay for the goods he needs.
Pat, can you explain in 3-4 sentences why the Democrats did this? And not because they're stupid, or because they think with their heart, not their mind, etc. I know all that. But it's these people's jobs to know economics and whatnot, so if any regular person like yourself can see the downfall of it, why would they do it?
It just confuses me why this issue has any differing opinions when there is hard evidence and numbers to prove it doesn't work? As in, I can see where they feel differently about sending more troops, because the outcome isn't predictable, but not with minimum wage.
This part kills me:
"Gina Walter, 44, a thrift store cashier from Columbus, Ohio, makes $6.25 under her state's minimum wage law, a wage that will rise to $6.85 this month. She brings home $388 every two weeks; her monthly rent is $365. She can't afford health insurance."
Now I feel bad for Gina, I do. Gina takes home $9,312 a year after taxes, which I imagine is very tough to live on. Here's my point though: she's 44 and a cashier; she obviously has retail experience. EXPERIENCE IS VALUED BY EMPLOYERS. If the thrift store can't pay her enough, she has the skills to work at another store or at the mall for higher pay. This is how the job market is supposed to work. You WORK your way up as high as you can get and if that isn't high enough, go somewhere else and keep climbing.
That's why, in the words of Rick Ross, "everyday, I'm hustlin."
And yet, nobody else thinks this way. The government has to step in and force the thrift store, which of course doesn't make much money anyway, to pay Gina a "decent" wage so she can stay at the thrift store and live slightly better than she did before the wage increase.
We need to empoyer our workforce and not baby them. This is America.
Alright, I'm off my soapbox.
Ryan will probably write me off as being nosy on this one.
Ryan, read Ty's post above and you'll find the answer. The Democrats are backed heavily by labor unions. If they didn't support a minimum-wage hike (which results in a substantial indirect wage hike for union workers), they would have received virtually no campaign support from donors last year.
Another reason they did it is because it's popular. It sounds good to do, 70% of Americans support it, so why not do what's politically beneficial and give the people what they want?
My favorite quote of yours was "...but it's these people's regular jobs to know economics and whatnot..."
No it's not. It's their regular job to win elections and stay in power. The only way to do this is to please your base constituency.
Virtually no one on Capitol Hill understands economics, nor do they need to to keep their jobs. If anything, economic illiteracy helps these people keep their jobs.
Without considering Unions (which makes the problem worse), draw a simple Supply and Demand Curve.
The Supply Curve (going from bottom left corner to top right corner) represents the Supply of Labor, i.e. number of workers able to work.
The Demand Curve (going from top left corner to bottom right corner) represents the Demand of Labor, the number of businesses able to hire.
Now, the intersection of the two lines represents the wage which the number of employees willing to work exactly equals the number of employees hired by employers. This is equilibrium. Here, the greatest number of people benefit, there is no dead weight loss. Equilibrium magically occurs when no minimum wage law exists.
Now, let's create a minimum wage. Draw a horizontal line across the graph, above the equilibrium wage.
Where the horizontal line intersects the Supply Curve and Demand Curve represents the new Quantity Supplied and new Quantity Demanded. Notice that the Quantity Supplied (number of laborers willing to work) becomes greater than the Quantity Demanded (number of laborers the employers are willing to hire.) The difference between the two quantities is unemployment.
Now, throwing the effect of unions greatly increases the problem.
And Ty has also pointed out the effect on goods. Costs for employers have increased, causing a price increase in all goods sold.
In short, the Minimum Wage causes unemployment.
and an increase in the price of goods.
Less workers and higher priced goods. This does not make sense.
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