While I am opposed
to a $15 minimum wage- I would love to see everyone get a living
wage.
I would agree 100%
with the notion that every full time employee should be able to make
enough money to rent or buy a house buy enough food to feed
themselves and take care of a dependent.
However- raising the
minimum wage will not allow this and the only way to make this dream
a reality is for people to have higher real wages which mean low
unemployment and lower prices.
The notion that
raising the minimum wage will result in a higher standard of living
across the board is simply magical thinking.
First- in order for
a higher minimum wage to mean anything for the bottom rung prices
would have to remain the same or at least increase less than the
minimum wage increase.
So when these posts
pop up I start talking about regulations, taxes subsidies , tort and
monetary reforms which the people supporting a higher minimum wage
will automatically dismiss under the claim that would only help the
rich then state that executives at McD’s make $8 million a year.
The supporters of a
higher minimum wage seem to believe that if you simply raise the
minimum wage- the executives will simply cut their own pay and it
would be enough to cover the increase with out raising prices or
cutting jobs which leads me to conclude that they believe that the
bulk of a burger’s price is the CEO’s pay instead of the
executives pay being a small cut of the burger’s price and selling
millions of burgers.
If they made their
money from mark up- then it would be reasonable to believe that they
could make money if they cut their prices. If they made their money
in volume – there would be little room to alter pay or other costs
upward. As lower prices tend to attract more customers- a company
that offers lower prices might be more profitable than one with
higher prices. We must also remember that industries with high
profit margins- no matter what the cost of entry is will attract new
competitors who will bring down prices.
Another fact to
remember as well- is that when the cost of running a business goes
up- companies will find ways to cut costs, raise prices or go out of
business- all of which harm the poor the most.
So any answer that
increases the cost of business must be rejected- and we must look for
other answers.
If the fast food
giants are big because they keep their prices low- decreasing the
cost of business will lead to lower prices. I will go though my next
few entries addressing each point starting with subsidies and taxes,
then monetary reform and finally tort and regulatory reform.
I am looking at
these things- as all I would expect to happen with a minimum wage
increase- is for people to loose their jobs and prices to increase
unless something offsets the higher wages. So let’s look things
that could lower the cost of business- there is a chance that it
might not increase the buying power of $7.25- however if that does
not happen the trade offs could be more raises, more well paying jobs
and lower unemployment making it easier for people to climb the
economic ladder- which is the common goal.
