Okay... in the past, I have always been an advocate of minimum wages.... but, I am rethinking my position these days for this reason: First, I believe the minimum wage is driven by union labor, which then forces a higher amount negotiated for government contracts. Second, when you look at the market place where minimum wage makes a difference, most low-skilled, but experienced workers make far more than the minimum wage, or even the proposed minimum wage. The minimum wage effects only entry level, low skilled positions that most young, inexperienced workers take. As they increase their skill level and experience, and demonstrate a strong work ethic, they receive raises. When you institute a minimum wage, you increase that entry level wage at the expense of the more experienced workers. Their wages become frozen until the cost impact of the rate increase works its way through the economy and is finally added to the price of the goods or services. So, minimum wage is only a short-term political gesture that really doesnt address the larger problems within the economy and unemployment, which is the replacement of low-skilled labor with technology, the out-sourcing of better paying industrial jobs to overseas labor markets, and the income distribution disparity. To address the problems on more of a long-term strategy, public policy needs to focus on lower future birth rates, since there will be fewer jobs available due to technology, attach trade tariffs so as to equalize the cost of overseas production to domestic, and provide more public programs for low income workers (such as health care and subsidized housing and education) and paying for it with higher taxes on the wealthy (1%). This takes care of the working poor, gives them more disposable income by subsidizing housing and healthcare expenses, plans for the future job reduction projections, and also provides more opportunities for middle class advancement through more skilled labor industrial jobs. Now, why wont this work?
Posted on: Fri, 14 Mar 2014 13:45:07 +0000