By now most have heard that Biden will raise the minimum wage to $15 per hour. Even Trump said he would consider it when asked at the debate. Trump said he did prefer to leave it to the states. I look at this from having been a minimum wage earner and as an employer.
Back in the 1970’s, I worked for minimum wage. It was only $2 per hour back then. At the same time, a new car cost around $2,500 to $3,500. A loaf of bread was around 28 cents and etc. That simply speaks to inflation which is one thing raising the minimum wage will do. But, there is much more to consider. Please don’t get me wrong. I’d love to see everyone earn a good living. The question is how we get there.
The biggest problem we face right now is getting our economy back on track. With many businesses going under how does anyone expect them to be able to pay more? If you want to drive small businesses out of business permanently, by all means, raise the minimum wage.
The next obvious thing is $15 per hour in New York City is not going to go as far as it would in a rural or suburban area. There should not be a blanket minimum wage. If they must do this then maybe they should prorate it using something like the military cost of living charts. That would be fairer.
What about people already making $15 per hour or more. Shouldn’t their wages go up to keep things on par? That means everyone gets at least a $7 per hour increase. How would that work from the business owner’s point of view?
Money doesn’t appear out of thin air no matter what Biden, AOC, and their kind think. Businesses will simply have to raise their rates on everything to pay the higher wage. That results in a zero gain for the employee over time. Sure, the $15 per hour wage hike would make them feel better in the short term. I will guarantee over time it will all even out when the cost of goods and services goes up so businesses can pay the higher wage.
What happens to the elderly, retired, and people on disability? Their pay is more or less fixed. They will not be getting a pay raise and the cost of goods and service increase will hurt them the most.
I know the left hates to admit it but Trump originally had it right. A rising tide lifts all boats. Wages naturally rose during his administration before the China Flu hit.
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Mike: You have a bad case of common sense. 8)
The minimum wage has not kept up with inflation since it was implemented in 1938.
The first minimum wage implemented in 1938 and was $0.25/hour or around $500 per year. This did not affect all industries. If that minimum wage had kept up with inflation, it would be around $26/hour, or $54k per annum.
In 1968, the minimum wage laws were changed so that they affected almost all industries. This the year most cited. Then the minimum wage $1.60, or just over $3k
The current minimum wage is $7.25/hour, or around $15k per annum.
The proposed minimum wage is $15/hour, or around $31k per annum. $15/hr is not a “radical” amount as one pundit stated.
No, $31k is not a comfortable wage everywhere, probably not even a living wage in NYC and a lot of other places. But it IS a lot closer than $16k. $31k IS a living wage in large portions of this Country. $16k is not a living wage in pretty much anywhere. Or at least everywhere most people would want to live.
The economy is struggling and raising the minimum wage would slow the recovery. But that degree of affect on businesses is extremely hard to determine. The affect on the workers of raising the wage is not.
Yes it would be a hardship for some owners. But so is $7.80/hour to some. But the solution to that is not to drop the minimum wage. It would help the owners but it would force the workers to get ANOTHER job. Most people trying to raise a family are already working 2 or 3 in order to feed their kids.
But the solution is not to drop the minimum wage, not even to benefit the owners currently struggling. But what would the affect of dropping the minimum wage, say to around $2.13 dollars an hour. In most of the country that amount “works” for waitresses, right? It would certainly help the struggling owners. Put a tip jar near the register. We all know how generous people are by the amount of their tips to the waitresses. (apologies for the sarcasm)
Raising the minimum wage may not be a permanent solution, but it is at least a temporary one. Trying to raise a family on the current minimum wage is pretty much impossible. So they end up using the Welfare and Charity. You can’t really oppose raising the minimum wage and also oppose the Federal welfare programs.
Raising the minimum wage would cause prices to rise. This would cause some business to go out of business. That’s horrible, but small businesses go out of business all the time. Should we save the few owners affected at the expense of the many workers.
Raising the minimum wage would not benefit everyone equally, and it would create all the problems you identified. Probably even more. It probably “screw over” some people. Raise wages and it would raise prices, a vicious circle.
But, what? The solution should not be to continue to “screw over” the people currently affected. I don’t know of any solution that would probably work, I don’t even have any suggestions. I am not an Economist or even a Business Major. Me recommending any solution would be silly. And since those experts can not agree on anything, no one is sure of what to do.
But paying people an amount they can not raise a family on, or even live on, is wrong. If something is wrong, it is wrong. Civilization should not allow wrongs to be done to people, even poor ones.
Wages might have been increasing before the Pandemic, but not for the poorest. They lost ground.
You are right, money does not appear from nowhere like some Dems think. Neither does it come from nowhere like some Reps think, re tax cuts without budget cuts. That thinking gave us the largest deficit ever, even before the pandemic. Larger than any Dem “spend” programs did.
How about we cap people’s income to $10 million per year. That should pay for it. Do you really even need $10 million per year. No, not at all realistic, re my comments on proposing solutions.
(The minimum wage data was taken from:
https://www.dol.gov/agencies/whd/minimum-wage/history/chart)
(I did not direct any of these comments at any person on this site, but were general in nature)
(I apologize for any error in Affect/Effect. I always confuse those two, even when I use a dictionary!)
Well, Jon, that was well thought out. I did not check your numbers but will assume them to be correct. As I started this reply I got a call from one of my dear friends who is a small business owner on the Outer Banks. He is a Democrat but the reasonable sort. He pays $16 per hour but saw that mandating a minimum wage of $15 will have those unintended consequences for many businesses. He agreed the retired and disabled will be the most negatively affected in the long run. So, I guess we all agree on that point.
It seems there is no stopping this from coming about with one party in control. I cannot predict the speed at which these negative consequences will come to fruition. We shall simply have to wait and see but make no mistake, we all see the downside. The upside for some will be as it has always been, temporary.
As you may know, I’m both a Christian and a Philosopher at heart. I’m immediately put in mind of something Jesus said. Hope this doesn’t trigger anyone. It simply points out something that is a couple of thousand years old and is still true today. Matt 26:11 The poor you will always have with you…
This emphasizes the truth of something you said in your comment:
I’m very pleased that you see the necessity for a solution. You are also correct that there is no perfect solution and that economists differ. I have a suggestion for a solution but it is not perfect, easy, or fast. That solution is to do what Trump was doing.
Keeping unemployment low causes business owners to pay people more. Cutting down on foreign hires also helps. Yes, it is true that we need some importing of skill. Balance is the key. Also, keeping illegal immigration to a minimum keeps wages up for unskilled workers. It is also true that some Americans will not do the work of illegal immigrants. We are back to the question of balance.
There are also his policies relating to trade and trying to incentivize a return of manufacturing to some level. That is very hard to do when Presidential policies change every 4 to 8 years. The new administration is promising to raise corporate taxes that Trump lowered. Any company who thought it was good to return to America will surely change their minds. Again, whatever we think on the left or right doesn’t matter. Business owners, especially manufacturers want low taxes and consistency. They will never get consistency from America.
Trump’s policies toward deregulation also helped new business startups and existing business expansion. Tariffs on companies that would leave America also helped. Fairtrade policies that were negotiated by experts rather than politicians served to raise wages as well. That will now be gone.
Success would have taken many years longer than even two Presidential terms. These policies would need to be promoted for decades and by both parties. That is a pipe dream. There is my suggestion for a long-term solution to the income gap and minimum wage issue. Please remember, I never said it would be perfect but I think it is the best path if we are to achieve a better life for more of our citizens.
Regardless of our best efforts, the poor will always be with us. It has been true for many thousands of years under all types of governments and economic systems. All we can do is promote the ideas that have the best outcome for the largest number of people. I contend that simply raising the minimum wage to $15 per hour is still a bad idea.
Agree and I always pull up Thomas Sowell to counter in discussions. But in this conversation, the point that should be made on the executive order is the false hope or headlines it creates. It does not promise a $15 minimum wage to anybody. It merely promises to review Federal Employment and Contracts. Fake news abounds over this EO.
Love Sowell. The original post was added before the executive order which only affects Federal workers. Some ideas still hold true even on the Federal level if they go that way. Yes, way too much fake news, everywhere!