Posts Tagged ‘labor union leadership’

MINIMUM WAGE INCREASE: PROS & CONS

Who can be against a livable wage and why would they possibly be against it?  That’s what this post is about.

The Congressional Budget Office (CBO) previously reported that if the minimum wage were to be increased to $10.10 nationwide, or a 40% increase, about 500,000 to 1,000,000 million minimum-wage employees, from a pool of 16,500,000 minimum wage employees, would lose their jobs because employers could not pay it and remain in small business.  However, if the new proposed minimum wage jumped to $15/hour, the effects of such a raise is estimated as being the loss of about one and a half million jobs.

So why do it?  The main argument is that it’s not a “living wage,” that no one can live on and raise a family on that wage.  Sounds like a reasonable justification but, of course, we need to look at other sides of the argument before reaching sound conclusions.  I already cited one of the primary reasons why government should not mandate raising the minimum wage too high…the loss of about 1,500,000 minimum-wage jobs; however, another significant reason is that it would almost shut down the first step on career ladders for unskilled workers…to the extent that they couldn’t even get that first job, get their foot in the door…because their work would not be worth $15/hour.  Many small businesses, like restaurants, are very sensitive to the minimum wage and when government mandates that wage to be increased substantially, restaurant prices increase substantially, which hurts the business and makes it fail (so the end result may also be the elimination of jobs).  Finally, it’s far more accurate to call the “minimum wage” the “starting wage,” because that’s exactly what it is for most people.

It appears that labor union leadership and consequently the Democrat Party is the only beneficiary of government mandating dramatic minimum wage increases with everyone else being harmed; therefore, gradual increases in the minimum wage may be able to satisfy genuine concerns of the minimum wage argument.

The best way to raise everyone’s wages the most is to create a booming economy like they did in North Dakota, for example,  where $15/hour was the starting wage in fast food restaurants because of the huge competition for employees that North Dakota’s great economy had fostered.  Former President Trump did precisely that with the U.S. economy, which resulted of a 3.4% increase in workers’ wages.  The government did not have to mandate minimum wages…they occurred naturally.

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