Minimum Wage Debate
Written by YellowJacket on January 10th, 2007I’m watching the committee hearing in the U.S. Senate that was recorded earlier today. Jared Bernstein, the Directer of the Living Standards Program at the Economic Policy Institute, spoke about his support for an increase in the minimum wage.
There’s a lot that I can complain about in Mr. Bernstein’s testimony. But I’ll just choose one to exemplify my point.
He spoke of a family of four, with one member of the household working a full-time federal minimum wage job, still being below the poverty level at the current minimum wage. I have some questions for Mr. Bernstein:
1) How many families of four like this even exist? (see #6 for a clue)
2) How many of these families’s parents have high school diplomas? College degrees? Vocational training? Education is a key to success in life.
3) How many of these families’s providers have made solid personal decisions their entire lives? (I’m not holding my breath here)
4) Why is it the government’s job to give people who have made poor decisions a pay-raise regardless of their productivity?
5) Why is the government hell-bent on making it harder for businesses to employ part-time work, mostly teenagers who are first entering the job market?
6) Are you simply ignoring the following information from the Employment Policies Institute?
The average family income for employees who would “benefit” from the proposed $2.10 minimum wage hike is $45,558. Why? Nearly six out of seven of these employees either live with their parents or relatives, have a working spouse, or are single and don’t have children.
Virtually all minimum wage employees will see their incomes rise as they increase their value to employers by gaining skills through experience. Analysis of US Census Bureau data shows the median raise these employees receive is six times higher than that of employees earning above the minimum wage.
This traditional growth out of entry-level employment explains why less than 1% of employees above the age of 25 are working at the minimum wage.
7) How do you sleep at night?
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This is not about economic fact. This is about socialism which is more of pagan belief than anything else. It is the religion of the elite.
Just wait for that anonymous fool to comment on your post later by saying he can’t believe how stupid everyone in the entire world is for not understanding why the minimum wage increase makes so much sense.
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One thing I don’t here talked about is the affect a minimum wage increase will have on union negotiated wages. I understand that many labor union contracts have their wages indexed on the minimum wage. If true, I suspect that may have an even larger anti-business impact.
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What results from an increase in the minimum wage?
1. Fewer after school jobs for high school and college kids.
2. Fewer jobs for the uneducated.
Business 101 proves that small businesses will pay a higher wage to those deemed worthy of being paid the higher wage. By increasing the minimum wage, Congress is forcing small businesses to take on more overhead. This overhead cuts into profit. To continue to profit, small businesses will do the following.
1. Increase prices - not likely
2. Cut back on Premiums (i.e. insurance)- fairly likely
3. Hire fewer people - very likely
4. Hire only people they will not have to train - very likely
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Bob, you forgot
5) Reduce the number of hours the current employees can work
6) Reduce service, perhaps with technology solution to make human laborer unnecessary for specific task.
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And Pat, yes, you have hit the nail on the head. Not only is raising the minimum wage a feel-good measure that most Americans approve of, but the unions that the Democrats are beholden to are automatically getting raises for their workers because union contracts base the pay of unionized workers on the minimum wage.