Skip to comments.CA: The Minimum Wage Calamity
Posted on 01/05/2006 9:06:49 AM PST by NormsRevenge
As the year begins, we find Sacramento once again considering raising the minimum wage. Only this time, Governor Schwarzenegger has indicated he might support a bill raising the minimum wage to $7.25 next year, and $7.75 the year after.
In the wake of high energy costs, high building costs, high liability insurance costs, and workers compensation reform that doesnt reduce costs nearly as much as we need to, we cannot afford to drive up the costs of doing business in California even higher. Even if you do not pay the minimum wage to more than a handful of employees, the inflationary impact it has on the entire salary scale can be significant.
The current federal minimum wage is $5.15 per hour. In California the minimum wage is $6.75 per hour. Left wing political rhetoric has succeeded in confusing the people into thinking that a wage is an entitlement, not the price that the worker is worth in the marketplace for the job performed, the skills possessed, or the desirability of the worker to the employer. I think it is time we remind ourselves that wages are, in fact, a price paid for labor.
Everyone is familiar with the harmful economic effects of arbitrary government price controls in other aspects of the economy. Rent control results in fewer rental units. Price control on any goods results in fewer of those goods. Price control on labor results in fewer jobs.
It is an emotionally charged issue, which fails to take into account the side effects of the law. If an employer has to pay an employee more than that employee produces for the company, the employer is losing money. So either the employee is fired, or the company goes bankrupt. Either way, the employee loses the job. This is government forced unemployment.
A forced minimum wage deprives the workplace of some lower skilled workers who would be capable of rendering beneficial services to an employer if that employee were allowed to be paid what his effort was worth, making that employee a productive member of society. The worker has been deprived of independence and self-respect which comes from self-support, even though he or she would otherwise be willing to do the work at a lower wage. Even worse, the best way to get a higher paying job is to do well at a lower paying job.
According to an analysis produced by the National Center of Policy Analysis, The primary cause of low income, , is no wages, not low wages. They conclude that most of those who earn low wages are either teen-agers or other secondary earners spread rather evenly across the income distribution scale. According to a summary of their analysis, While the single mother trying to support her child on a full-time minimum wage job is a better story, the 16-year-old hamburger-flipping student with college-educated and employed parents is a better fact. Low-income families have a large number of people without jobs and without the skills to get a job. A mandated minimum wage forces them even further out of the job market.
Increasing the minimum wage increases the cost of goods and services, forcing many of the people who lost their jobs as a result of this government intervention to either pay higher prices, or do without. The government has deprived them of a job they could perform, and which would form the basis of further training to acquire higher wages, and has increased the price of goods that they might otherwise have been able to buy. All of this is sold to the public in the name of helping the poor. Some help!
Low-income families do not benefit from a minimum wage, and neither does the taxpayer. Once again we will consider increasing the cost to employers in California for a program that has never shown any legitimate long-term benefit to the poor, and that has far more often been shown to be a detriment not only to employers, but to the very poor the program is supposed to help. After all, you can only make the minimum wage if you have an employer who is providing a job.
Make the minimum wage $20.00/hr and they will be happy........
It's enough to make you cuss.
As a former employer, I can say that by the time you pay a wage, a social security contribution equal to the wage-earner's contribution, unemployment tax, pension fund contribution, and health insurance, you have nearly paid enough to hire another entire worker (sans those contributions).
If you raise the minimum wage, you are going to create LESS jobs, not more (as you will be further hiking all those other payments which are dependent upon the amount of the wage)
Oh what a lot of poo-poo!
Paying your workers enough to stay alive is not a bad thing.
Conservatives should be in favor of EMPLOYER RESPONSIBILITY,
not in favor of employer looting. Looting is what happens when you
pay a worker too little to live on and expect the taxpayer to pick up the difference.
parsy, who has some sense.
I know, I was being sarcastic............
If you raise the minimum wage, you are going to create LESS jobs...
The libs know that but THEY DO NOT CARE. They are BUYING VOTES, while they are destroying businesses that need minimum wage workers and making ILLEGAL IMMIGRATION for jobs more attractive to Mexicans...Vincente and El Presidente Jorge are smiling!!!
They will be happy until all the prices for goods and services triple. Then they will be screaming that they can't make ends meet on just $20 an hour!
Mr. Haynes is a smart man.
Then make it $50.00/hr!..........
If not this year, in 2010 he should be considered for the GOP ticket for either Lt Gub or Gub.
He isn't perfect and doesn't have a huge Q factor , but he shoots as straight as he can. We could do a lot worse.
Newsflash: Employers don't owe you a job.
parsy, who has LOST YOUR senses
I agree with you. I used to go for the line that it will hurt employers but I see to much gouging by employers to belive that anymore. I see employers living the extremely high-life while they pay their employees a meager salary. The first example I could give of that would be nursing home owners, but I could go on.
This is not looting. This is one of two things. (1) The employer is paying less-than-market rates, and will soon find that his best employees are leaving for greener pastures. (2) The work done by the employees is not highly valued by the market, and the employer cannot afford to pay higher-than-market wages.
... and expect the taxpayer to pick up the difference.
Why should the government force taxpayers or businesses to subsidize poor people? If there were no minimum wage and no welfare, people would work hard enough to eat and live. Some people would choose to work harder for the rewards of a larger paycheck; some people would work just hard enough to feed themselves. Why does government need to stick its nose in the equation?
Uh, huh. And is it looting when you don't hire that worker at all? Who picks up that difference in that case, do you expect?
BREAKING NEWS - we don't live in the old Soviet Union. The government should not be "setting wages." Wages are set by the competitive marketplace.
Please see 'Capitalism & Freedom' by Milton Friedman if you need further reading on this subject.
All the arguments you are hearing are the same ones you hear all the time. I think, in my opinion, that it hurts Republicans when we don't think people that work in hotels, nursing homes, fast-food,etc....deserve to be paid better. We all talk advantage of the services they provide, or probably will one day.