The Rockin Johnny B

Friday, March 1, 2013

Oh that damnedable minimum wage

Why not have $20 minimum wage?
   Concerning raising the minimum wage law here in Idaho, in her recent article Rep. Phylis King states, “Extensive research shows that a higher minimum wage has a positive effect on the economy.”
   This got me to thinking. If that is true, then why not raise the minimum wage to, say, $20 an hour? These wage earners then would have much more money to spend in the local economy, “which raises profits and revenues and leads to hiring,” as states King.
   Doesn’t it seem that if the employer has to pay more in wages, that he will either raise his prices to cover this increase or he will hire fewer employees? How does this lead to hiring, as stated by Rep. King?
   It would seem that if wages are increased that, in most cases, this would cause the businesses to raise their prices to cover the higher wages. Then the low-wage earner, when he goes to buy things, has to pay more. Then the minimum wage would have to be raised again so they can afford to pay the higher prices, and so forth and so on. Where does this stop?
   What if there was no minimum wage and each business paid employees what they felt was fair? If a person wants to work there for that wage, then great. If not, then they go to another business that will pay them more. If no one would work for that wage, then the employer would have to raise his wages till he could attract the employees he needs.
   Doesn’t that sound logical? Why do we need government telling us how much we can pay employees?
   Instead of raising the minimum wage law, I vote for doing away with it.
Larry Nielson, Caldwell

Larry, Larry, Larry, I know you actually believe your argument is logical. However, it is not. Raising the minimum wage has been shown to have little or no effect on either hiring or having any hardship on our economy whatsoever.
Let me try this math on you and see if we can clear up your skewed thinking. If you are making $10.00 per hour and I raise your pay to, say...$11.00 per hour what will you do with the extra dollar? There are actually only two choices: spend it or save it, right? Odds are you will spend it because when you make more...for some odd reason, you spend more. Could it be that we spend what we have unless we are miserly and save whatever we are given extra.
So, you have an extra dollar to spend. Where do you spend it? Now, there's only one choice: good/services. Now, your dollar goes into the economy to be used by merchants and other places who also spend it on other goods and services.
You see, that extra dollar I paid you did nothing unusual to the economy. You felt briefly better because you got a raise and you felt you could order up more goods and services and the economy literally sucked up that raise without even working up a sweat.
Then you say we should just do away with the minimum wage altogether. Hmmm. What would that do. Right now, the minimum wage is approximately $7.00 per hour, or for a 160 hour month, $1120.00 per month. What do you think would happen if the poor person making 11-hundred a month was suddenly cut off from that money? Oops? What then would the economy do as a reaction? Now is the time to use your logic and reasoning. What indeed would happen if the majority of modern America was suddenly cut wage-wise the sum of say, even $5.00 per hour? The economy would take a major hit and would probably send it into an immediate recession. Imagine … NO DEMAND … for goods and services. Except, of course, for the rich. But wait. The rich. What would happen to them if the people they depend upon to buy their goods suddenly could not buy their goods? Hmmm. Not a good scenario at all.
Finally, Larry, do you remember when there was no minimum wage? Doesn't sound like it. I'm old enough to remember. I remember no unions. I remember robber barons bringing in scab labor to do the job. I remember the workers taking to the streets with clubs, knives and guns. Minimum wage gave the worker at least some kind of guarantee. At least the minimum wage worker could expect to make a certain wage for their efforts. The minimum wage scale kept this powder keg from blowing up completely. And you want to go back? Not me.
You can go back to 1950, but I like my color TV and my car that can actually go farther than 50,000 miles before it needs a new engine. Things cost more than the did in 1950, but people make more than the did in 1950, so the economy is still the economy that exists. The dollar buys less, but we make more dollars, so the economy just keeps rolling along and it always will as long as there is demand for goods and services and the supply of money stays constant. If we went back to 1950's dollar for dollar value, the economy would still be the same. The same guy who couldn't afford a 1950 Cadillac still cannot afford a 2013 Cadillac.
The point is, Larry, nothing will change with the raise of the minimum wage. All it does is keep the the wages commensurate with the cost of goods and services.

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