Raising the minimum wage? Once again the idea of raising the minimum wage is being kicked around. The move is being led by our commander and chief (President Obama). Has anyone noticed this topic always becomes popular around election time? Democrats push this in order to win the vote of millions who make minimum wage or just above that mark. This idea sounds great and will fool a large portion of the population but it is far from a good idea. The minimum wage long ago was a necessity but that is no longer the case. Raising the minimum wage to 10.00 per hour will prove to be catastrophic to the economy. Ok, Maybe I stretched it by saying catastrophic but it will slow the economy, inflate prices and raise unemployment. When the rate is increased some businesses will be forced to make a decision between laying off workers, raising prices, cutting benefits or a combination of all. Whatever they decide to do one thing is sure. They are in business to make a profit and if the profit falls below their target action will be taken. Millions of part time college and high school students will be out of a job and at the same time we will all pay more for our cheeseburger and fries. At 10.00 per hour it will mean the wage is increased roughly 39% but to make it simple lets use 40%. If the increase is passed across the board at our local stores the 2.00 hamburger becomes 2.80. If you take a family of four to Ruby Tuesday and the bill today is 65.00 you will pay 91.00 for the same meal after the minimum wage is increased to 10.00. Now we all know if the tab is that high people will cut back on dinning out which in turn will force business owners to keep the price at a lower level. How can they do this with an increase of 40% in their labor cost? Its simple they will cut benefits first and if the price point is still too high the next step will be to reduce the number of employees and force the ones remaining to carry the extra load. A few will argue this and think that the increase is a wonderful thing. To those I say I have some great ocean front property in Tennessee I would love to sell you. These people dont understand economics and have no idea what it takes to run a business. Its really simple so stay with me. There will always be a group who are at the bottom of the wage chart. If you set the minimum wage at 20.00 per hour that will be a higher bottom but its still the bottom. The money they earn at the new wage of 10.00 per hour will end up being worth not much more than the 7.15 due to the inflation in prices across the board. The people hurt from the increase will be the HUGE majority of our population who are middle income and make 11.00 - 20.00 per hour. These workers will see their income take a huge hit in buying power at the local stores. The hardest hit will be the elderly who are on a fixed income. Will they in turn get a 40% increase in their benefits? The answer is a huge no. The millions of retired people who worked their entire life will have 40% stolen right out from under their eyes. My last thing for the night is this. If moving the minimum wage to 10.00 per hour is such a wonderful idea and is going to solve the problems of the poor someone please explain why it has to be phased in over 3 years. If its all great then why dont implement it tomorrow and lets get these people more money. The fact is that it will be a shock to the economy and 99% of things that have to be phased in are not good. Obama and his followers will stop at nothing to swing votes. The dependent on the government we become the more likely his party will win upcoming elections.
Posted on: Fri, 06 Jun 2014 00:00:51 +0000
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