Obama is now out there trying to peddle the idea that we need a raise in minimum wage. There’s so many problems with this! On a very simple level, it is going to raise price of goods, essentially canceling out any benefit for those who may need it. If you, as a company, are required to pay more in employee paychecks, guess where the money comes from? The consumer! Prices will NEED to then go up.
Secondly, it makes employers less likely to hire, which means teenagers will have a more difficult time entering the workforce and gaining needed experience. Think about it this way, using fictional numbers: if an employer has $10 a month to spend on employees, and minimum wage goes from $2 to $5, the workforce at that company is necessarily going to drop from 5 down to 2, or, as I mentioned above, the prices will go up, which may end up having the reverse effect of hurting sales, which will aggravate the problem, possibly bringing the employee budget to $5, which would end up with one employee. Look at that: from 5 employees to 1, all because of minimum wage increases.
But lastly, minimum wage jobs aren’t meant to be family supporting jobs. If people are living on them, the main problem is the lack of economic growth. That’s what we need. As they say, a rising tide raises all boats. If we can get the growth, the minimum wage won’t be such an issue. People will be able to leave jobs if they aren’t getting what they need.
Updated on 3/23/2013