So this raise in minimum wage has really got me. I understand individuals would like to make higher wages but the economic results of raising minimum wage does no good for anyone. Consumers are affected. Many private business have to raise their prices for goods or services to support the necessary staff they pay at minimum wage. Employment is affected because fewer people can be hired with the same budget for wages therefore the unemployment rate increases. If this happens the output on a national level decreases as does the standard of living.
This is just a minimal look at the economics behind raising minimum wage. ANY person could look at these results and see a raise in minimum wage, to be blunt, is stupid. Of course I understand that it isn't the policy makers that actually make the policy, it is the lobbyists who pay them to make the policies that do but I genuinely feel that if the average American understood the consequences of this seemingly "good" decision to raise minimum wage it would not even be a topic of conversation on the government level.
Interestingly, I just had a debate about this with another blogger here. Two midwestern states that are adjacent had a difference in minimum wage; one's wage was higher than the others. In the state with a higher minimum wage, employment skyrocketed, productivity went up and workers from the low-wage state scurried across the border to work. The low-wage state began to suffer and had to raise their wages to compensate.
A minimum wage hike doesn't harm anybody, and if we don't force companies to pay livable wages, then people are going to suffer...companies are after profits, after all, and couldn't care less about their employees.
(if you can't see the fnords they won't eat you)
The raise in minimum wage may be good for the teenagers just getting jobs, but the truth is thats all that its good for. The price of everything else has gone up too. What we really need is inflation of property and housing to go down before this could help.
The evidence is overwhelming; the minimum wage is bogus. Hans Sennholtz has a great article over here.
Thank you very much for the article :) I think he says it much better than I managed to.