The minimum wage myth

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Progressives and others often point out that current minimum wage jobs cannot support a family. For several years they have been promoting increasing the minimum wage. Workers have gone on strike demanding higher minimum wages. Some companies have responded and several states have increased the minimum wage. Six states have now increased their minimum wages with Maryland being the latest. Their plan is to increase the minimum wage gradually until it hits $15.00 an hour, a move that some are predicting will cost the state 94,600 jobs.

Across the country, while the minimum wage is increasing, more and more businesses are cutting hours, eliminating jobs and closing their doors. People like Bernie Sanders and AOC do not seem to realize that these businesses are in business to make a profit,  and with the steady increases in taxes, minimum wages and other costs the profits are not there. No one needs the hassle of trying to run a business as a hobby. If there is no profit, the business will close and people will be out of work. At that point their wages will be zero.

After Seattle increased its minimum wage to $15.00 researchers from the University of Washington studied the effects of the increase. They found that the increase in wages was more than offset by a reduction in hours worked which resulted in low wage workers actually earning $125.00 a month less. Of course, those promoting increased minimum wage rates can’t be bothered by such facts nor can they be bothered by the impact their poorly thought-out policies have on people.

With robotics widely available capable of performing many tasks we can expect to see more and more of them replacing human labor. Robots do not require a minimum wage, insurance or any other benefits. McDonald’s and other restaurants are even now eliminating cashiers and replacing them with kiosks which will deprive untold numbers of young people the opportunity to learn valuable work skills and earn a paycheck. Big Box stores such as Wal-Mart are replacing their cashiers with self check-out lanes putting more people out of work. As robots replace humans we can expect more people entering the welfare programs costing our nation even more tax dollars. The demand for increasingly higher minimum wages will not end well for this nation and its workers.

Another problem with increasing the minimum wage is that it discourages anyone from attempting to improve his or her skills in order to get a higher paying job. Just how much is it worth to flip a burger? A free market can determine that much better than some politician setting a minimum wage saying that all burger flippers must be paid X amount of dollars per hour. If the worker isn’t satisfied with what he or she is making they can add to their skill base and go to a job that pays more.

I got my first job the summer before I started my senior year in high school (1965). I was a bagger for a local supermarket making .75 an hour. A few weeks later I was promoted to a stocker. I worked that job all through my senior year, working 50 hours a week most weeks. I kept asking for, and receiving, small raises until I was making $1.25 a hour as graduation neared. A few weeks before graduation I asked for another .25 raise, was turned down and quit for a job that offered me $1.50 to start. I was 17 years old and didn’t need the government to order some employer to give me more money. As I improved my skills I earned more money because I asked for it. When I finally asked for an amount the owner couldn’t afford he refused, and I found employment elsewhere that would pay more. Three months after taking that job I found another job that started me at $2.10 a hour. That’s how it’s supposed to work. No one will have the incentive to improve themselves as long as the government keeps playing nursemaid.

Yes, the current minimum wage is not enough for a family to live on. It was never intended to be. It was intended to provide financial support while individuals were able to find better paying employment through improving their skills. If people are unwilling to improve those skills to make themselves more valuable to employers then they should not expect to earn much or live on government handouts the rest of their lives. No one with any self-respect should be satisfied with either of these alternatives.

If the minimum wage keeps rising we will see more people out of work or working reduced hours so they still cannot support their families. This puts more people on government assistance which seems to be what some in Washington and in many states want. Increasing the minimum wage as a way to help raise the standard of living of low income people is a myth being promoted by people who do not understand simple economics or who have an agenda that does not bode well for the future of our nation.

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