Wednesday, March 6, 2013

Minimum Wage Laws and Sob stories

The Pittsburgh Post-Gazette is out with an article that is intended to stir up the national debate to raise the minimum wage law.  The minimum wage law impedes ones liberty to come to a voluntary agreement between another party at an agreed upon wage.  Minimum wage laws INCREASE unemployment amongst those that need jobs the most.  The wage you are worth to an employer is related to the marginal revenue product that you produce.  Most people that promote a raise in the minimum wage understand economics (especially supply and demand laws), that they know what the minimum wage should be.  I say why not make the minimum wage $20/hour?  The response I have received is that that is too much.  I then reply asking how they know that?  They usually say that the price of goods and services will raise too much.  I say you are correct, and any increase in the minimum wage will mean a raise in the price of goods and services.

From the article:
Charlotte, N.C.-based Family Dollar, which pays her the minimum wage of $7.25 an hour, recorded a profit of $80.2 million in its most recent quarter, according to a filing with the Securities and Exchange Commission.  
Yes, lets punish a company that operates on profit-loss signals, and produces a profit.  How about Family Dollar just pay every employee $50 an hour?  How much profit would it still have?  How many stores would have to be shut closed?

Also from the head of the Wage and Hour Division of the Labor department (can't get more gov't title than that):
At minimum wage "you can work full time and make $14,500 a year," Ms. Maxwell said in an interview. "What a lot of people have to do is work two of those jobs. What the president is saying is let's reward hard work."
What about the hard work of the person that starts a business from scratch?  Why punish him or her?  I don't get it.  No one is forcing these people to work at these jobs.  They choose to apply for these jobs and accept these jobs with these wages offered to them.  If the minimum wage increases, the cost of products and services will go up, and unemployment will increase.  And in doing so, no one becomes wealthier.

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