Why don't people "get it"? Increasing the minimum wage harms workers, consumers, and the economy, despite what the liberal talking heads appearing on MSNBC say.
Just last week, unions staged a fast-food walkout in 100 cities to agitate for the minimum wage to be increased to $15/hour. Since July 24, 2009, the federal minimum wage for covered nonexempt employees has been $7.25 per hour.
While many have opined concerning the walkout's failure to bolster their argument against raising the federal minimum wage, The Motley Monk thinks people need to understand why the proposition of increasing minimum wage--to $12.50/hour, $15.00/hour, or $1k/hour, it matters not--is inherently flawed.
The simple and straight-forward explanation is that the increased cost of labor will be added to the price of goods and services, passing that increase on to consumers. It's nothing more than a "tax" or "fee" that's levied at the point of sale. Fed up, consumers will stop purchasing those goods and services with their discretionary income and, at some point, this behavior will lead to layoffs and workers to go on unemployment.
- 23k applications were submitted for the 600 jobs available when Wal-Mart opened its first stores in the metropolitan DC area.
- Meanwhile, members of Washington's City Council debated and almost passed an ordinance that would have required the area's newly-established, big-box retailers like Walmart to pay a "living wage" of $12.50/hour...$5/hour above the federal minimum wage.
The simple fact is that many of those who are out of work and seeking jobs--especially teenagers and low-skilled workers--are willing to work for less than the $12.50/hour many on the DC Council want and a whole lot less than the $15/hour unionists who staged the fast-food walkout are demanding.
With teenage unemployment in the metro DC at 50%+, one would think that increasing employment would be the primary objective of City Council members and unionists.
Bad. But, it gets worse.
Villareal points to a University of California-Berkeley study:
- 330k fast-food workers are enrolled in Medicaid--the healthcare program for the poor--and 432k children of fast-food workers are enrolled in the Children's Health Insurance Program.
- If the minimum wage is increased, more of those low-wage workers will become unemployed or unable to find a job in the first place. Then, the cost of public assistance programs will increase.
Unfortunately, those who want to raise the minimum wages are blinded by their ideology that doing so helps those who work minimum wage jobs. The facts indicate otherwise: Doing so harms consumers, workers, the economy, teenagers, and low-skilled workers.
Let the discussion begin...
To read Pamela Villarreal's article, click on the following link:
"Big Hike in Minimum Wage Will Be Self-Defeating For Workers."