Friday, September 17, 2021
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Minimum Wage Will Always Be a Poverty Wage

I’ve never understood the idea of a minimum wage law. Why should the federal government be telling private businesses how much to pay employees? That’s a function of the market. When the government intervenes, the market reacts. Always.

Today the rate of teen unemployment (age 16-19) stands at a staggering 24% in this country. In May of 2000 teen unemployment was 13%.

Michael Saltsman of the Employment Policies Institute explains:

It’s one of the fundamental laws of economics: When you increase the price of something, you will ultimately decrease demand for that product. With the first anniversary of the recent 40 percent hike in the minimum wage upon us, we see that maxim in effect once again. A new study by labor economists William Even (Miami University) and David Macpherson (Trinity University) shows that the federal wage hikes implemented between July 2007 and July 2009 were responsible for 114,000 fewer employed teens. Businesses “bought” less labor.

In states that felt the impact of the full 40 percent wage increase, teen employment fell by 6.9 percent. Indiana was emblematic of this nationwide trend. The $2.10 wage increase was responsible for a 7.9 percent decline in the number of employed 16- to 19-year-old Hoosiers. The decline is even steeper for those teens with less than 12 years of education, who suffered an 11.5 percent drop in employment.”

Liberals argue endlessly that the minimum wage should be a living wage; a wage that will support a modest lifestyle for the worker. Saying it doesn’t make it so. A job is more important than setting a pay rate for entry level employees that kills those entry level jobs. People need a chance to learn how to work rather than sit around collecting a government check for not working.

The current federal minimum wage is $7.25 per hr. Some states and cities impose their own higher minimum wage laws. They can set it wherever they want to, it will always be a poverty wage because the market will adjust from the floor. At best, a few people get a temporary benefit when the rate increases. Others lose their job or can’t get a job. Everyone is punished by the price increases passed along to cover at least part of the wage increase. Have you checked the price of a Big Mac lately?

Unintended consequences are the result of government intervention in the free market. Higher prices and fewer jobs are not the only outcome. Idle hands really are the devil’s workshop. Kids who are working don’t have time to participate in violent flash mobs or terrorize the local beaches.

The minimum wage destroys entry level jobs. The 40% jump was a killer for many small businesses, caught in weak market conditions, unable to raise prices. Democrats demagogue this issue without remorse for the jobs lost. In fact, some are lobbying to INCREASE the minimum wage. Yeah, that’ll work to boost the economy. If it really did, we could all agree to make the minimum wage $30 per hour and live the happy, happy, joy-joy life.
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Disclosure: I have been operating a small business for the last 30 years. I have always paid substantially above the minimum wage . . . not because I wanted to, but because it was required to attract and retain employees.

texasgalt
Texas native. Conservative small businessman with 31 years experience. Government should roll back the nanny state. No country can tax its way to prosperity. The question isn't who will let me but who will stop me?

10 COMMENTS

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10 COMMENTS

  1. Using even a tad of common sense, the laws of supply and demand are as understandable as the laws of gravity. And yet, the Opposition beats the ‘living wage’ drum, the ‘gotta support a family’ drum and the ‘fairness’ drum. What on earth is fair about a 24% unemployment rate among those who need to learn to work? If McD’s burger-flipping jobs hadn’t manifested last month, the jobs report would have been even grimmer for 0. And why doesn’t the MSM talk about ‘burger-flipping’ jobs negatively anymore…? As Thomas Sowell points out, the minimum wage rightfully should be what’s negotiated between empolyee & employer, not something set by any legislature.

    • You’re right about the burger flipping jobs Mark. All during the Bush years we heard about a “jobless recovery” and comments about all the job increases being just low wage McJobs. Now people are begging for McJobs or any other job no matter what the pay.

      It’s all in who’s in charge for how the media spins it.

      P.S. Mark if you’re coming to the breakfast in Pekin Saturday, we’re going to have our very own presidential straw poll. I’m printing the cards now with only declared candidates in alphabetical order.

    • The culture has been poisoned by leftist fairy tales, including the minimum wage.

      Remember when the days were long
      And rolled beneath a deep blue sky
      Didn’t have a care in the world
      With mommy and daddy standing by
      Happily ever after fails
      We’ve been poisoned by these fairy tales
      -Lefty Don Henley. . .

      he wrote the truth for the wrong reasons and still doesn’t know it

  2. ” Cleveland vigorously pursued a policy barring special favors to any economic group. Vetoing a bill to appropriate $10,000 to distribute seed grain among drought-stricken farmers in Texas, he wrote: “Federal aid in such cases encourages the expectation of paternal care on the part of the Government and weakens the sturdiness of our national character. . . ”
    !!! Yes, it was 130 years ago, but the stingy old coot, a Democrat, wouldn’t even help the drought-stricken farming community in Texas. Now, the Democrats make it their business to be Pater to every demographic capable of pulling the lever.
    Who’s yer daddy, TG?

  3. Minimum wage and child labor laws have resulted in generations of American youth who do not connect hard work with success.

    They avoid it as long as possible, staying in school for well into their late 20’s pursuing degrees that don’t offer employment except at government (funded) institutions or mega corporations, taught to ridicule or despise people who work in factories and ACTUALLY make things.

    We are destroying ourselves in so many different ways.

  4. And in conjunction with the liberal establishment’s destruction of education in the government schools, these kids don’t have a chance to change this. They are “graduated” with no work ethic and no education, yet Uncle Sugar sets a minimum wage so high they can’t be hired.

    Some of these kids would be lucky to get an apprenticeship. They can’t do math or read, let alone sensibly evaluate circumstances and make wise decisions. And their formative years are wasting away in an environment of helplessness and discouragement.

    This is not a recipe for success for our country’s future.

  1. Using even a tad of common sense, the laws of supply and demand are as understandable as the laws of gravity. And yet, the Opposition beats the ‘living wage’ drum, the ‘gotta support a family’ drum and the ‘fairness’ drum. What on earth is fair about a 24% unemployment rate among those who need to learn to work? If McD’s burger-flipping jobs hadn’t manifested last month, the jobs report would have been even grimmer for 0. And why doesn’t the MSM talk about ‘burger-flipping’ jobs negatively anymore…? As Thomas Sowell points out, the minimum wage rightfully should be what’s negotiated between empolyee & employer, not something set by any legislature.

    • You’re right about the burger flipping jobs Mark. All during the Bush years we heard about a “jobless recovery” and comments about all the job increases being just low wage McJobs. Now people are begging for McJobs or any other job no matter what the pay.

      It’s all in who’s in charge for how the media spins it.

      P.S. Mark if you’re coming to the breakfast in Pekin Saturday, we’re going to have our very own presidential straw poll. I’m printing the cards now with only declared candidates in alphabetical order.

    • The culture has been poisoned by leftist fairy tales, including the minimum wage.

      Remember when the days were long
      And rolled beneath a deep blue sky
      Didn’t have a care in the world
      With mommy and daddy standing by
      Happily ever after fails
      We’ve been poisoned by these fairy tales
      -Lefty Don Henley. . .

      he wrote the truth for the wrong reasons and still doesn’t know it

  2. ” Cleveland vigorously pursued a policy barring special favors to any economic group. Vetoing a bill to appropriate $10,000 to distribute seed grain among drought-stricken farmers in Texas, he wrote: “Federal aid in such cases encourages the expectation of paternal care on the part of the Government and weakens the sturdiness of our national character. . . ”
    !!! Yes, it was 130 years ago, but the stingy old coot, a Democrat, wouldn’t even help the drought-stricken farming community in Texas. Now, the Democrats make it their business to be Pater to every demographic capable of pulling the lever.
    Who’s yer daddy, TG?

  3. Minimum wage and child labor laws have resulted in generations of American youth who do not connect hard work with success.

    They avoid it as long as possible, staying in school for well into their late 20’s pursuing degrees that don’t offer employment except at government (funded) institutions or mega corporations, taught to ridicule or despise people who work in factories and ACTUALLY make things.

    We are destroying ourselves in so many different ways.

  4. And in conjunction with the liberal establishment’s destruction of education in the government schools, these kids don’t have a chance to change this. They are “graduated” with no work ethic and no education, yet Uncle Sugar sets a minimum wage so high they can’t be hired.

    Some of these kids would be lucky to get an apprenticeship. They can’t do math or read, let alone sensibly evaluate circumstances and make wise decisions. And their formative years are wasting away in an environment of helplessness and discouragement.

    This is not a recipe for success for our country’s future.

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