Raising the Minimum Wage: A Boom or a Bust?

Notwithstanding the idiotic comment by Barbara Lee, a candidate for the U.S. Senate in California, who is proposing raising the minimum wage to $50 per hour, California is instituting a $20 per hour minimum wage. One has to ask this question, how many businesses will be going out of business as a result, and how many workers will be laid off also as a result?

The minimum wage was never meant to be a “living wage”

The minimum wage was never meant to be a “living wage” that proponents claim for someone supporting a family, it was meant mainly for teenagers, looking for extra spending money, and retired people looking to supplement their pensions and savings. For teenagers, it is a means of getting experience in the business world which hopefully will give them experience for future employment.

Think of how many of today's business executives started out as minimum wage workers, and have risen through the ranks to become successful in the companies they worked for as a minimum wage worker, or who have been successful in other businesses as a result of their work experience as a teenager or college student?

For me, as I worked my way through college, I got a job at the prevailing minimum wage (at that time $1.00 per hour), and have never regretted that experience that I received doing that job. My main career in life was that of a business education teacher who used some of my early minimum wage experience in the curriculum I taught for over 30 years.

Let the free market prevail in letting employers set their own wage rates as they see fit

When California's $20 per hour minimum wage law goes into effect, two major things will occur. Number one, many businesses who hire entry level employees will have to raise their prices to meet the higher costs of doing business, with the result of losing customers, and their business income. 

In addition, many people who worked at these companies, mainly teenagers and senior citizens, will be laid off or their hours cut back. Secondly, many small companies or stores will go out of business since they'll be unable to make a profit as a result of these extra operating costs of doing business.

To answer the proponents of the government mandating higher minimum wages, I'd ask this question, wouldn't it be better for a worker to be employed at, let's say, $10 per hour, than to be unemployed at $20 per hour? Let the free market prevail in letting employers set their own wage rates as they see fit, and are able to encourage workers to join their company or store. If they can't find workers at the wage they offer, they'll have to raise them to attract employees, but that should be their decision not the government’s decision.

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Can the average McDonald's customer afford that?

Our country has an inflation rate that is up around 20%, from 3 years ago. By instituting the higher minimum wage it will encourage the inflation rate to increase, as the prices of goods and services will also increase. It will be like a domino effect upon our economy making it difficult for the average American to make ends meet. Can you imagine Walmart paying a greeter $20 per hour to say “Welcome to Walmart” ? It has been reported that a McDonald's “Big Mac” meal now costs $18. Can the average McDonald's customer afford that?

So when the minimum wage is increased in California and around the country, or even the ridiculous amount of $50 per hour as proposed by that California senate candidate, the negative effects upon our country will be profound. We should let the free market prevail, and the government should keep its hands off, as their record of government interference has been disastrous in practically all endeavors they get involved in. There are too many people in our country that want us to play with the “Socialists” playbook, which hasn't worked in our country or anywhere else in the world. 

We are a Constitutional Republic, if we can keep it, as the erudite founding father, Benjamin Franklin once proclaimed. Let's hope we can keep it.

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