Economics for Dummies (or the Left)

I’m not an economist. Never have been, never will be. But I believe do look at things fairly logically.

I live in Illinois. We, like many states, have recently raised the minimum wage. Now, on the surface this seems like a very humane thing to do. Helping the guy at the bottom seems very noble. How can a family make it in the US making the minimum wage? The problem is, this is not the genuine reality.

According to the Bureau of Labor Statistics, the majority who actually work for minimum are between 16 and 24. Only 2 percent of workers above age 25 earned the prevailing minimum wage or less. The truth is that most of the minimum wage workers are young or second income workers and almost 70 percent only work part time. The myth that someone is supporting a family just doesn’t support the numbers. I know there are those that do, but this is not the norm.

What this does is artificially raises income for these workers. Most of the employers in who hire entry level workers at minimum wage in the US are small businesses. Most of these businesses are not able to simply absorb the higher cost of paying their workers higher wages just because the government says they should. The prices of products can only raise so high before consumers look for other solutions. The effect is actually lower employment for those who actually need it. Businesses may just move out of an area to reduce their costs.

A real solution would be to actually remove these artificial wage controls. Some jobs are not worth paying the prevailing minimum wage. Most jobs offer entry level for a reason – you’re not suppose to stay at that level. I’ve worked for minimum wage in many jobs, all while in High School or College. I have started all my other jobs outside of college as entry level and worked my way up. It’s the American way, or at least it used to be.

Of course, that’s just my opinion.

Rob’s Rant

Source:
http://www.bls.gov/cps/minwage2003.htm
http://www.heritage.org/Research/Economy/wm1186.cfm

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