Tuesday, January 16, 2007

Minimizing Minimum Wage

I often consider starting another blog that separates my political opinions from comedy. In reality though, politics provide some of the best comedy fodder.

Congress is raising the minimum wage. Why is this funny? Ultimately, the raise gets taken in taxes. Sure it’s a raise—a raise in tax revenue for the gubmint.

Does anybody make minimum wage anymore? I mean besides high school students with no marketable skills. Even in my rural Kansas community, the unemployment rate is so low that business owners tell me the most unskilled workers laugh at minimum wage. In addition, many states have their own minimum wages already.

For the sake of argument, suppose there really is an abundance of skilled, educated Americans making $5.15 an hour trying to support a family (research shows otherwise, but remember this is an argument). When the minimum wage goes to $7.25 an hour, employers have no choice but to make up the difference somewhere. Perhaps they’ll cut the number of hours the employees work. Perhaps they’ll cut jobs entirely. Most likely, the difference will be made up in retail prices. Now the person making $8.00 an hour has to pay higher prices, yet doesn’t get a pay raise.

Wages should be driven by the market, not the government. Keep raising the minimum wage, and the next problem will be an increase in unemployment and poverty--the very thing we're told minimum wage will prevent.

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