Posts Tagged ‘minimum wage’

What they know for sure that just ain’t so about the minimum wage

February 27, 2014

Some corporate shills say they “know for sure” that raising it will result in fewer jobs.  They claim that if you raise the price of labor, you will have less of it, simple supply and demand.   But it just ain’t so. The common sensical know employers hire workers when they have work to get done.  A restaurant owner hires a cook when they need a cook.  If they have to pay that cook a little more per hour, are they going to lay them off?  No.  They still need a cook.  They might raise prices a tiny bit if their market competition will allow it.  They might take lower profits for themselves (now there’s a novel idea).  They might shift spending on material goods.

Raising the minimum wage actually boosts overall employment.  Those who earn at that level spend everything they earn.  They may buy more from their own employer or from the store down the street.  This increases demand, more work needs to be done and more workers are hired.  The whole wage scale slides up a little too, which adds more demand.  Consumers are the real job creators, so when you give them more money they create a need for additional jobs.  This has been the actual effect when the minimum wage has been increased in the past, including the 4 years following the minimum wage increase of 1996.  Why should we think it would be any different today?

With so many large employers paying such low wages, millions of workers cannot make ends meet.  They have to rely on assistance programs paid for by the taxpayers.   This boosts government spending, deficits and debt.  It is also a de facto subsidy of those businesses by the taxpayers.  However, if we raise wages, incomes go up and more is paid into, not out of, government funds.  More sales taxes are paid as well.

You’d think there would be widespread support across party lines for raising the minimum wage.  And you’d be thinking right, because there is widespread support among the American people.  It’s the conservative elected officials blocking the road to prosperity for us all.  They, such as our two Texas Republican Senators Cornyn and Cruz, know a lot that just ain’t so.