Raising the minimum wage is always stupid and always a bad idea…and here’s why

One of the issues that Obama (and the left in general) has been hitting a lot recently is raising the minimum wage. This is a profoundly stupid idea (even though Republicans I like* and don’t like have suggested it as well). Despite the left’s insistence on banging this drum (because it sounds really nice, pay poor people more money…but only if basic-math-for-liberalsyou ignore anything beyond the shortest of short term consequence) it is an idea that has its origins in racism and today only hurts the people it claims to help (you know, like most liberal policies). Now in reality the only reason liberals love this is that they love to play up the class-warfare that they rely on (they don’t have any real ideas to run on), but they get repetitive and feel if they say the same thing in numerous ways that makes it true…as such this blog will get a little repetitive knocking down the arguments over and over again.

 

Now before we get into too much detail there are 7 points I would like to make.

 

1. Raising the minimum wage will increase unemployment.

2. Raising the minimum wage will increase inflation. 

3. Raising the minimum wage will hurt people with the least amount of skills, the very people liberals claim it will help.

4.  The opposite of all of this is also true (lowering the minimum wage will reverse all of these; less inflation, more employment, more people in all brackets having jobs).

5. If you want to whine about the poor people not having enough, go sell your computer and give the money to the poor.  But liberals won’t as they are less generous than conservatives.

6.  There is no short term fix that can wave a magic wand and give people more money without causing long term harm.

7. The free market is the only long-term solution.

 

These are all facts and they are not disputed by people who actually know something about economics.

 

So let’s start dealing with these in greater detail.

 

  1. Raising the minimum wage will increase unemployment.

This is the most obvious. There are no cases where raising the minimum wage did not lower employment.**

 

None. You raise the minimum wage, and you will see fewer people employed.

 

Especially with small businesses, if you can only afford to pay so much for employees then raising the cost of employing people would mean they’re just going to lay off employees and expect more from the employees who are left. And with large businesses that employ lots of minimum wage employees…well I would get used to ordering your fast food from a kiosk and checking yourself out at Walmart and the supermarket. Technology gets cheaper every year and what keeps big businesses from switching over to automation right now is that it’s simply cheaper to keep using the minimum wage labor…but hey, go ahead, raise the minimum wage and make it even more attractive to convert right now.

If you raise it then you make workers less attractive…businesses are not there to provide jobs, they are there to tumblr_mx5otbWwGS1s4tkgno1_500make a profit while providing a service to the public, if you have a problem with this simple fact of reality you are too stupid for words…and when you make it impossible for businesses to make a profit at their current staffing levels they will ALWAYS choose to fire people rather than go bankrupt (which also tends to result in firing everyone).

 

 

Raising the minimum wage hurts the middle class – they get no raises but have increased costs both from raised prices in the economy and the potential of tax increases because long term it never works for the lower class. Regardless what people are told/think the middle class does not receive comparable raises to match minimum wage increase.

2. Raising the minimum wage will increase inflation. 

 

Now liberals like to claim things like: “If you raise minimum wage then large companies will only have to raise their prices a little to defer the costs and there won’t be any real increase in inflation.”

 

Even if the math were accurate in this statement, which it isn’t even remotely (but let’s play in the left’s delusional ballpark for just a second) the left apparently don’t understand little things like supply and demand.  Even a small increase in price will result in a large drop in sales which means that not only have prices gone up (inflation) but people will have to be laid off, because far fewer hamburgers are being sold, to maintain profits (which have been dropping if you haven’t heard) or even just breaking even, lots of employees would have to be laid off due to reduced sales.  So once again, due to a lack of understanding in economics your desire to help people without doing anything yourself has resulted in inflation and, again, higher unemployment.  Typical liberal tripe.

 

And the worse yet, there are idiots who suggest we tie the minimum wage to the rate of inflation.

 

So a minimum wage increase will cause inflation and inflation will cause a minimum wage increase and a minimum wage increase will cause inflation and inflation will cause a minimum wage increase and a minimum wage increase will cause inflation and inflation will cause a minimum wage increase and a minimum wage increase will cause inflation and inflation will cause a minimum wage increase and a minimum wage increase will cause inflation and inflation will cause a minimum wage increase and…

…well, the next thing you know it’s looking a lot like Zimbabwe or Germany in the 1920’s where a couple trillion dollars will get you something off what used to be called the dollar menu…but it certainly won’t buy a whole loaf of bread.

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It would be a lose-lose for everyone.  For the people trying to live off minimum wage they would not see a real increase in wages but they would also have an even higher unemployment rate (which will also hurt everyone due to more welfare applicants being funded by money we don’t have). (do we want to comment on the actual number or type of person that is actually trying to live on a minimum wage job, which is REALLY low)   For the lower middle class the inflation caused by the minimum wage hike will hurt them drastically as they were probably already having problems paying bills. For the upper middle class the inflation increase will probably only result in less money for nonessentials (dinners out, movies, vacations, etc.) but this in turn will have dire consequence for the industries and the people that they employ that see lower revenue.  I would say that unless you’re in the top 2% you’re going to see some kind of belt tightening with the inflation another minimum wage increase would cause, and even then you’ll see major hits to investments (unless you’re in that top 2% because you own a small business in which case you will be more likely to have to close down).

 

 

3. Raising the minimum wage will hurt people with the least amount of skills, the very people liberals claim it will help.

 

Raising the minimum wage will hurt people with the least amount of skills as businesses will only hire people who have someone who can vouch for them (thus it becomes more of a game of who you know).  This means minority unemployment will go up and upper middle class take-home pay (but not in real pay, due to the inflation) will also increase as in the children in these families with the connections to get hired.  Not exactly the egalitarian push liberals were hoping for.

 

Due to the fact that liberals have engineered an education system that systematically hurts minorities to ensure they don’t have stable homes or quality education (yes it’s liberal plans like the New Deal and the Great Society that are responsible for this) this makes them the groups that will most be hurt by a minimum wage increase as they are statistically the groups with the least education and work experience.

 

The current US unemployment rate is 7.5% the unemployment rate for those with a BA is only 4.5% (so sayeth the Dept. of Labor).  We all know that college graduates are underemployed (though maybe not to the degree that liberals would like to suggest) but even if all the minimum wage jobs aren’t going to people with Bachelor’s as the left likes to portray the fact is that a raise in the minimum wage will only increase this disparity. After all who would you fire from a job the guy with the B.A. who might make a manager one day or the single mom who is often a little late because of her kids? Yes the example takes two extremes, but it points out that the raise in minimum wage will hurt the very people that liberals think they’re going to help with this idiotic law.

 

 

But then again we knew this as the original point of minimum wage wasn’t to help improve the quality of life for workers but to help keep lower skilled minority workers from competing with union employees. By forcing people to pay a minimum wage they wouldn’t take the risk of lower skilled labor which ensured that minorities never had the capital to invest in their own education or their children’s. But let’s keep this policy of liberal discrimination in place.

 

 

4.  The opposite of all of this is also true (lowering the minimum wage will reverse all of these; less75068181143 inflation, more employment, more people in all brackets having jobs).

 

And if you really care about those people you should push for LOWERING the minimum wage, thus making it MORE attractive for employers to hire people.

 

If you were to lower or eliminate the minimum wage you will reduce the risks of hiring new employees (and thus make employers more willing to hire inexperienced employees). This will mean more low skilled people looking for jobs will have an opportunity to get a job and thus get the job experience and skill necessary for them to get out of minimum wage jobs.   This in turn means that not only will more people be earning more than minimum wage (and likely keep moving up the payment ladder) but turn over in minimum wage jobs will be faster (as people get promoted) and that there will be more job openings.

 

Now the obvious argument against this is that “minimum wage is supposed to supply a living wage.” First that has never been true.

 

Well, the first Federal Minimum wage was $0.25 an hour.  For 40 hours a week that’s only $10 (after adjusting for inflation that’s $166, hardly what I would call enough to support a family). Also economist Walter Williams often points out that the real reason originally for minimum wage was to hurt black workers and push them out of the market.

But in the final evaluation it doesn’t matter what the intention was, intentions don’t matter.  What matters are the effects/results.

Minimum wage laws lower employment rates so fewer people are able to support themselves and/or their families.

Minimum wage laws increase inflation thus making it harder for everyone to support their families on whatever wage they have.

People can raise minimum wage all they want, the effect of any increase, of any size will only be more people unable to support themselves and those dependent on them.

 

Second, you think people should be able to live off the absolute minimum skills you should have to get hired.  Minimum wage is a statement that “If I could pay you less, I would because you have no skills worth paying you more.”  And if you didn’t keep raising it then teenagers could get minimum wage jobs when they don’t have to live off it, and have the skills necessary to earn livable wages when they’re older.  But you know that’s only a thought that deals in reality.

 

 

5. If you want to whine about the poor people not having enough, go sell your computer and give the money to the poor.  But liberals won’t as they are less generous than conservatives.

 

Charity is at it highest when economic freedom is high and that conservatives have ALWAYS been more charitable than liberals (please see the book Who Really Cares by Arthur C. Brooks for endless proof on this point).

 

Capitalism is the only system that has been shown to raise people out of poverty. It is the only system that benefits the rich, the middle class, and the poor. It is the only system that can bring a nation out of destitution. It is the only system that works long term. It is the only system compatible with human nature. It is the only system of economics that is ethical. It is the only system of economics that is sustainable because only capitalism creates and encourages the innovation and imagination needs to deal with the constant slew of problems that life brings.

 

In conjunction with everything I’ve already pointed out, if you raise the minimum wage you will be hurting everyone and more people will be out of work, people will be earning less in terms of real dollars, business will be expanding less and less and that will result in far less charity.

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Don’t claim to care about people needing to make a living wage when you are doing everything in your power to hurt them and nothing to help them.

Trying to destroy the free market through rules like minimum wage will only further hurt people. If you’re so concerned for them either advocate policies that will really help people in the long run, and do your bit in helping people. Don’t demand that other people pay for things that you don’t want to pay for.

 

 

6.  There is no short term fix that can wave a magic wand and give people more money without causing long term harm.

But some liberals will claim that this or that person will be hurt if we dropped the minimum wage or that someone can’t pay their bills right now. Because to liberals that’s the only thing that matters right now.

 

And to those liberals whose childish demand for immediate solutions shows your intellect and those like you are below contempt.

 

You cannot solve long term problems that were created over decades by one inane and ludicrous short-term solution with another short term solution.

There is no solution to the problem RIGHT NOW.  Why?  Because the problem RIGHT NOW was created by the shortsighted looking to solve the problem RIGHT NOW with no concern whatsoever for the long term consequences.

If $10 is good this should be great.

If $10 is good this should be great.

Only the most brainless of idiots (you and the loons in Washington) look for solutions to the problem RIGHT NOW.

Does that mean some people will suffer RIGHT NOW, yes, yes it does.  Life can suck, and can be grossly unfair.  It’s a damn shame that you never learned this…it’s probably more of a tragedy that people did try to teach you this but you didn’t learn it.  But it’s more of a tragedy when you cause more people to suffer in the long run because you fail to admit this point and try and prevent things with shortsighted solutions.

Any solution to fix the problem right now in the immediate present will cause even more grievous problems for the future…just as all the short term fixes have caused the current problem.  Now you can look for an immediate solution and hope that it won’t cause more problems in the long term (doing something the exact same way and expecting a different outcome is the common definition of insanity)…or like an adult you could admit that short term fixes don’t work, that they will only cause more long term suffering, and look for a solution that will fix the problem long term and ensure this situation does not happen.

So the question is that will a few suffer now or will generation upon generation suffer in a shortsighted attempt to stem the problem in the short term (which won’t work).

I, like an adult, choose the long-term solution. And that solution is, has always been and will always be the free market.

I suggest we actually let the free market do what it does best: create wealth.

If we lower or eliminate the minimum wage businesses will be more willing to hire people, yes it will be for lower wages, but people who are good at their jobs will have more opportunities to shine and get promoted to jobs that pay more (employers actually do appreciate good employees and will give them raises to try and keep them).

Since more people will be employed (even at lower wages) you’ll find that overall there is more money flowing through the system, thus the velocity of money will increase, investment will increase, more high paying jobs will be available and those people who shined in lower level jobs will be able to use that as references for better jobs (which will also open up their old positions letting more people shine).

As more people earn more, more services will be needed more products will be sold and this whole thing becomes cyclical.

If we let the free market rule and don’t drown it in a million and one ways through centralized control.

Time and time and time again if you study history or economics you will see that freer the market, the lower the povertythe lower the corruption, increase in social mobility,  and a whole host of other things.  Fact and reality dictate that the more of a free market you have the more of things you want (for the poor, the middle class, and the rich) occur and less of the things you don’t want.  Facts also dictate that government intrusions like minimum wage ALWAYS WITHOUT EXCEPTION lead to less of the things you want (like prosperity for all) and more of everything you don’t want (like the starving children you complain about).

Caring about these people and acting out of best intentions as you do is one thing. But if you really want to help them learn that throughout all of history more economic freedom has prevented the things you complain about.  Stop advocating for the very things that cause the suffering you complain about.

But liberals claim that without a raise in the minimum wage people will be stuck in poverty through no fault of their own. This is wrong for two reasons. The first is that time and time again, despite liberal efforts to hurt economic mobility through their asinine policies, economic mobility still exists and most people born into poverty do not stay there through their entire life.

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But perhaps you mean the people who are chronically in poverty and who don’t escape.  Well first let’s look at what causes those things, because chronic poverty isn’t a cause of suffering it’s symptom of other things.  (Even though that’s not really ‘poor’ as obesity is a real problem among America’s poor…if you can afford more than what you need to survive you’re not really poor…or would you like to tell people who live under the kind of control economies you seem to be touting where starvation is a real problem not just a conceptional one as it is here in America that people living on minimum wage aren’t making enough?)

Now the liberal Brookings Institute found three things that lead to chronic poverty, none of them had to do with minimum wage.  I could go into detail but I think it’s summed up best by a Democrat:

“You need only do three things in this country to avoid poverty – finish high school, marry before having a child, and marry after the age of 20. Only 8 percent of the families who do this are poor; 79 percent of those who fail to do this are poor.”

– William Galston, advisor to Bill Clinton.

Hmmm…which of those will raising the minimum wage solve?  Ummm…none of them.

But perhaps you’ll claim I’m blaming the victim, your stupid shaming, or something, to which I respond:

But, just for fun, let’s play in your delusional ballpark for just a second.

Let’s say you raise the minimum wage.

This will of course cause inflation.  So not only would the real wage of minimum wage works not go up, but you would hurt everyone else who isn’t making minimum wage and will now actually have less money.  So the question isn’t why do I hate the poor, it’s why do you hate the middle class and want to hurt them so much?

Of course minimum wage also dries up potential jobs. This disproportionately affects minorities leaving fewer and fewer jobs for them.  So the question isn’t why do I hate poor people, it’s why do you hate black people?

And of course since there are fewer jobs all around it will of course leave fewer jobs for the poor.  So the question isn’t why do I hate the poor, it’s why do you hate the poor.

Your policy will also hurt people on fixed incomes (mainly the elderly) and those without skills in search of an tumblr_msik9ea2Hh1rxlva7o1_500entry level job (the young)…Jesus, is there anyone but middle age rich white guys you don’t hate?

I would love to help the poor have more money. I could do that by dropping tariffs which would either lead to lower prices at stores or higher profits which could be invested back into the company or in banks and from there other companies which will lead to more jobs somewhere. Same goes for sales taxes. I would love to help the poor by ending subsidies for colleges which would cause the hyper inflating bubble of tuition to burst which would thus make higher education much more affordable to the poor (added bonus it would leave the middle class without huge debt which again would stimulate spending and thus the economy).  I would love to help the poor by making better schools through disbanding the teachers unions, getting rid of foolish credential requirements for teachers and putting sane common standards for all schools thus attracting better teachers and thus helping ensure more students will stay in school thus breaking cycles of chronic poverty.

I would like to do a thousand things to help the poor.  But the problem with all these solutions is that it will take time to fully work, and they all will work, but they take time.

For you however, you would rather say you want to help the poor and do something you can see right now, with all the self control of a two year old, because you to have it right now.  To hell if it hurt the poor in the short and the long term.  Why should that matter, you feel you have to do something NOW, even if doesn’t actually work, so you can feel good about yourself…why is this?

 

7.The free market is the only long-term solution.

But again let’s get back to real long term solutions.

 

How about this? Go to a flat income tax, that will give everyone more money…add to that a reverse income tax then we can make sure everyone has a “living wage” without taking away the incentive to work (and get rid of a massive portion of the federal budget in the process).

 

Or perhaps get rid of regulations that required to enter into numerous fields and let employers decide if they want to pay your or not (instead of the government). (This does not read properly) (I think it reads ok – maybe you could give an example for people that do not understand – easy one is beautician/cosmetologist – some people are talented without school and it goes up from there.)

 

Tort reform thus reducing everyone’s overhead.

 

States should try cutting sales taxes to give everyone’s buying dollar more power.

 

Or perhaps you could get rid of the massive amounts of red tape you have in every business in every level freeing up money in business which will lower the risk on return for taking a chance. (removal of government unions /prevailing rates, etc. would trickle down to providing a better economy all the way around)

 

Or the most important thing you can do if you want people to have jobs: get rid of the minimum wage and get rid of all the idiots at all levels of government who advocate for it.

 

*If you watch the news you know who I’m talking about. I am really hoping he meant in his usual inarticulate way of “I would offer a raise in minimum wage for a concession of less regulations or lower taxes or this or that tit for tat” as I know his thinking tends to work. And maybe in that case I would be willing to offer a minimum wage if I were to get something I wanted more…but I’ll admit the statement that was getting passed around the internet was either not well phrased or just stupid.

**Now there are cases where the minimum wage is higher in one place than another but has a lower unemployment (such as when liberals like to point to Australia having a higher minimum wage but lower unemployment)…but in every one of these cases you will find it’s not even remotely an apples to apples comparison. All things being equal raising the minimum wage will always lower employment, but seldom are all things equal. There are numerous issues like tax policy, regulation, tort law, power of unions and government intrusion on business, to name just a few, that affect unemployment. In the case of Australia, ranked as the 5th most economically free nation (even with their higher minimum wage) on Earth it should come as no shock they have lower unemployment rates than the US which is ranked 18th. Now if liberals would like to change policy and law at the federal, state, and local level to make the US regain its rightful place as the most economically free nation on Earth, I would be more than willing to concede a $10.10 minimum wage. The minimum wage increase would still be stupid, but one stupid thing to get a thousand others that will counter it, that would be a fair deal. Strangely I’m not seeing any such willingness to even compromise on even a few of those issues coming from the left…as usual they want everything they want and to not give them everything is to be against compromise…and to be against anyone who isn’t rich is their usual claim.

 

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