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If you give people more for doing the same, what will you get?

More of the same.

I am not for or against raising the minimum wage personally, but philosophically I believe it makes for some interesting fodder. It is easy to see why the people who work for a minimum wage would want a raise. I would too. Why not? You mean I keep doing the exact same thing and you give me more money? I don’t have to get better? I don’t have to be more productive?

In essence, a minimum wage job is an unskilled job. It is usually a task that anyone can do. This is why its a minimum wage job. What the people who are pushing for this increase fail to see is that they are going to push themselves out of a job or into more work.

It doesn’t take an economic genius to figure out that this increase is going to hit the bottom line of the businesses….large and small. This forces businesses to make adjustments…because long term, the businesses are the ones who make the jobs available in the first place because they are succeeding so they will protect their profitability and hence their viability at all costs.

So…maybe they raise prices. Therefore the wage increase (which will not be totally face value) will be sucked up by higher prices across the board….is there a net gain to anyone? Nope. Well actually short term the government gets more…what a surprise!!! Maybe you say, well if they raise prices, then people won’t buy as much so that will hurt the business owner…so what will they do? Oh, they’ll reduce their work force, starting with the least valuable workers….and who are they? The minimum wage worker.

So…maybe they reduce the workforce. This would make perfect sense…if we have to pay them more, lets use less of them and give them more to do. Congratulations, out of 5 of you who stood together on the picket line, now two of you will stand together in the unemployment line.

So…maybe they finally invest in the next level of technology. Great the minimum wagers say…work will get easier! Nope, I’m not talking about THAT technology….I’m talking about technology that replaces the worker all together. Look around…lots of jobs in factories, grocers, gas stations, etc. have gone away already in the past 20 years…technology only builds on itself. Not to mention, this is a free market society. Entrepreneurs are constantly looking for needs in the market to meet.  Let’s see….businesses will be looking for ways to do their business with less workers…and quickly…what low hanging fruit is out there to be automated?

The only people who stand to win short term, are the politicians who push this through. Because they will look like a hero to the portion of the population who is looking for something for nothing..which is increasing everyday because…well…the more people who get something for nothing the more people who want something for nothing. Then they will be invisible when this move has a negative impact on the economy because it will look like the business owners…aka the people who make an economy happen…are the ones being bad guys by doing what they have to do to stay business owners!

Wouldn’t it be better to focus on how to make people WORTH more?

Just food for thought.

 


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