Saturday, January 31, 2009

Misconception of the Day: Minimum Wage

Minimum Wages undermines the poor, and working nation, it doesn't support them (us).

Raising the cost of hiring someone, doesn't make people pay those that they've hired more, it makes them fire people. It's not out of cruelty, it's out of the need to be sustainable, would you make lemonade and sell it on the side of an extreemly hot road for no pay? your whole life?

It also means that a company if less likely to hire 8 people, but instead only hire 5, and give the work load of 8 to 5 (or less) - in order to cut costs, workers have to do more.

Think of self-serve gas pumps, not all that long ago, they wern't self serve, mostly high school kids would take the job for about 2 dollars an hour (which would equate to a bit more than that now that our monetary system is so inflated), and they could do homework at the same time, as well as recieve tips.

When the "minimum wage" was created, forcing businesses to pay their workers at least 5 dollars, those jobs were eliminated.

It's difficult for a teenager to find a job that works with their hours, most jobs want someone more experienced, even Whole Foods only highers at 18.

This is what the minimum wage has done, is doing, to our country.
It's a myth that it's helpful, it doesn't raise pay, it eliminates jobs.

1 comment:

  1. I like your analysis.

    There are two other interesting things that may be worth thinking about:

    -In markets prices are always equal to or above the lowest that the seller will take and equal to or lower than the highest that the buyer will take.
    So if I will sell for $6+ an hour and you will buy for $10-, we may settle on anything between 6 and 10. If we, for whatever reason, settle on $6.25 and some legislation prevents you from paying less than $8, my wage will be raised $1.75 and I will not be unemployed.
    Of course this is not always the case.

    -In some rare instances, a minimum wage law might bring forth coincidences of preferences which will raise the wages of a few.

    But, neither of these things could forseeably overcome the costs of increased unemployment.