Tuesday, March 8, 2016

Minimum Wage Hike a Bad Idea

I’ve been thinking over Gov. Crowmo’s plan to raise the minimum wage to $15 an hour. This is a very stupid thing to do. It is only being thrown out there to attract more votes for Democrats. Democrats are more stupid when it comes to spending money than Republicans – believe it or not!
The people who are now earning minimum wage are, of course, jubilant. You can’t blame them. They have not thought through the consequences of a mandatory $15/hour wage and they probably wouldn’t care if they did know the consequences. They would be other people’s problem.
A $15 minimum wage means everybody who works must be paid at least that much, right? The sales girl at Walmart, the cashier at McDonald’s, the guy who greases your car at Quick Lube, the waitress at Friendly’s. They will all be making $15 an hour. Which means the prices of everything they sell has to go up.  A $10 blouse will be, say, $13. A Big Mac will probably go up to $8. A grease job might be, say, $30. A stack of pancakes will likely be around $10. Someone has to pay for that raise – us, the consumer.
How about those people next up the line – the supervisors and the managers? Many of them are making $15 or less now. They will be madder than hell when, after the raise takes effect, the bottom of the heap workers are making more money than they are. So they’ll want a raise, too, to maintain the separation and their station. So maybe now the blouse costs $15, the Big Mac costs $10, you know what I mean. Pretty soon fewer people, people who have no jobs, or work part time jobs and have less money to spend because inflation is raising the prices of goods and services will be going shopping or eating out.
The truth is the push to raise the minimum wage to help reduce income inequality is a misplaced way to help the poor. While there are working heads of family who somehow get by on minimum wage, the vast majority of those who work a minimum wage job–some 80%, according to the American Action Forum-are not supporting a family with that wage. For them, a minimum wage job is a step into the world of work, the first step into something more profitable.
But the higher that first step is, the more difficult it becomes to move higher. Raising the minimum wage by $6 an hour, as the governor is insisting, is going to mean a lot of teens are going find work hard to find. The employers who hire minimum wage workers are mostly small businessmen on a thin budget. Where he used to be able to hire two people for, say, $18 an hour, after the wage increase, he’ll probably not be able to afford two. One will have to keep looking for scarcer and scarcer work.
Liberals push for a higher minimum wage in part because the likely alternative to helping poor working parents-the income tax credit- would cost the government money. But a minimum wage, particularly a much higher one, cost the economy plenty, although in a less overt way-in the form of fewer jobs for unskilled, inexperienced workers and rising prices for all.
Republican opposition to the minimum wage does not imply an indifference to the plight of the working poor. It is intelligent recognition that the government cannot simply legislate away the problem of inequality. If we want to help the working poor we need to help them become more productive and create more jobs-getting rid of an over-regulating administration would be helpful-and stop pretending that merely mandating higher wages solves the problem. Causing a mirage of seeming wealth will not lift the poor out of poverty but will, very likely, bury them in more of it when they think they’ve got more than is really there.
Improving the plight of low-income heads of households is a worthy goal, one surely worth pursuing, but not if we create all manner of collateral damage in the meantime. Our unthinking governor should find something else to do with his time, rather than screw up New York's economy worse than it already is.

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