Minimum Wage

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This cartoon is really all that is needed to understand the minimum wage debate, and why raising the minimum wage is bad for workers. The point is that if you make it more expensive for businesses to hire workers, they will either hire fewer workers, give current workers fewer hours, or raise prices. Someway, somehow, the new labor costs need to be compensated for, and the liberal dream that big corporations will all of a sudden sacrifice executive pay and profits in order to raise the wages of their workers is, well, just a dream. The economics here are really not too hard to understand. In fact they are quite simple. Yet day after day we hear democrats calling for the raising of the minimum wage, despite the fact that even the government’s own studies say that raising the wage would result in unemployment. Also, keep in mind the the greatest cruelty of the minimum wage is that it hurts the poorest and least skilled people (the ones it supposedly helps) the most. The first ones who will lose their jobs are the more expendable employees that get paid low wages because they have low skills (perhaps they are young and are just entering the job market). Thus the ladder in the picture above. Raising the minimum wage is like cutting off the bottom rungs of a ladder in the name of making it easier to climb.

So if it is so obvious, why do democrats still harp on the minimum wage? In my mind it is simple: politics. The liberal agenda has failed to revive the economy and elections are coming up in the fall of 2014, so democrats need a talking point to arouse their base and, more importantly, make republicans look like cold hearted bastards (even though they are just common sense minded people who realize the true effect of the minimum wage). This is the strategy that worked against Romney and it is a strategy the democrats will keep using until it fails. They key for the GOP is to get articulate republicans out there to explain why raising the minimum wage is bad, focusing on how it hurts the weakest and most vulnerable. Of course, it would help if the GOP also put together an anti-poverty agenda focused on free markets and economic growth to show the American people that conservatives have ideas on how to fix our country’s woes.

P.S.

I gave a very simple economic lesson on the minimum wage. For an in depth analysis I will include a link here to actual experts on the matter.

http://www.cato.org/joining-the-minimum-wage-debate

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