Is raising the minimum wage a good thing for our work force? Does it really increase more jobs and create better households? From one side of the river, it sounds as if everyone got paid more, everyone would have more money, which would make more people be able to pay their bills and pay taxes.
Many presidential candidates propose raising the minimum wage, some, including Bernie Sanders, support $15/hour. Sanders claims that the current wage is too low, so low in fact that average families can not make enough income to support themselves. However, let’s take a look at the possible consequences of raising the minimum wage.
Does [raising the minimum wage] really increase more jobs and create better households?
Let’s use an example to represent the case against minimum wage. Suppose there is a small business of 20 employees. They sell vacuum cleaners. A democratic candidate is elected to High Office and passes a new law causing minimum wage to be $15/hour instead of the current $8. This means that the vacuum store now has to almost double the pay of each employee. If 20 employees work a normal 8 hour work day, the expense for the business is $300 for that day rather than the previous $160 a day. This may not be such a big problem for a large corporation, but it will be a large problem for small businesses that are struggling with their expenses.
Steven Crowder – Raising the minimum wage doesn’t increase wealth, it eliminates jobs.
Now, rather than having 20 people employed at $8/hour, the store has to layoff half of its employees. At least 10 people are out of work because of the minimum wage increase. It’s also possible that the entire business has to shut down, which means 20 people are lacking jobs. Or perhaps the store decides to raise the prices on all of his products to compensate for the raise in expenses. This means that everyone has more money, but prices are higher. That doesn’t make much sense, does it?
Sometimes the most powerful way to ensure families generate a larger income is not to put limitations and rules on small businesses, but encourage families to become educated and earn a higher payer job, or to encourage small businesses. In the end, raising the minimum wage doesn’t create wealth, it eliminates jobs.