Raising the Federal Minimum Wage Is a Bad, Bad Idea

In last night’s State of the Union address, President Obama proposed raising the federal minimum wage to $10.10 an hour. He even made some quippy comment about it being easy to remember because it’s 10-10. I’m hyucking at you, speechwriters.

Anyway, that’s a terrible, horrible, rotten, no good, very bad idea. The current federal minimum wage is $7.25, so raising it to $10.10 is quite the substantial increase. I know, $7.25 isn’t really a living wage, yada yada, it’s not fair that people have to make that little amount of money, and so on and so forth.

But you know what’s worse than making $7.25 an hour? Making nothing. What exactly do you think will happen when employers can’t afford to keep around their low-level workers? They’ll let them go, that’s what.

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My parents are small business owners. I remember one time getting a lesson in real life from my dad, because I had heard in the news that the minimum wage was going up, and being a child and therefore naïve, I thought it was swell. My father, being much older and wiser, told me that because of that mandated raise, he had to let someone go.

He’d had an entry-level employee that he paid minimum wage to keep the factory floor tidied up. He swept and cleaned spills, ran errands, you know, just basic go-fer stuff. It was worth it for the cost of his wages. The guy was happy he had a job, coworkers were happy for the help, everybody was happy with the situation.

Small businesses generally run on a very tight budget. So when the government stepped in and decided that my dad wasn’t paying that guy enough, he didn’t have the financial wiggle room to pay him more. The employee said he didn’t care, he’d keep working for the lower wage, but being an upstanding citizen, my dad wouldn’t employ him illegally.

This happens a lot. And then these entry-level workers can’t find work because the jobs aren’t there. So they go on welfare. Now business owners have even less money to hire new employees, because in addition to paying the people that do work for them, they’re now paying higher taxes to pay the people that don’t work for them.

Work is worth what someone is willing to pay for it. Most everybody starts at the bottom. If you don’t want to make $7.25 for the rest of your life, then figure out how to get promoted. Take classes, acquire new skills, do the best darn job you can at what you do, and ask for more responsibility.

That’s how you climb out of poverty. Not by raising the federal minimum wage.

Are you for or against a higher federal minimum wage?

 

Image via Teddy James/Flickr

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Einyn Einyn

That's a very simplistic way of looking at it

nonmember avatar Marleyzoe

Wow. No wonder why people think that conservatives hate the poor. Jenny,you really need to take a few lessons in compassion.

nonmember avatar Shannon

Simplistic perhaps, but true. Minimum wage jobs aren't meant for support families for long term.

nonmember avatar Paige Kaye

Let's say I have two full-time (unlikely) minimum wage workers, and I pay them $7.25 per hour. The Fed raises the minimum wage by 39% - $2.85 per hour, which adds $.042 in payroll taxes, as well.

Those two employees now cost me an additional $261.60. Yikes! That seems like a LOT! If I'm a retail shop open 11am - 9pm, I have to find another $26 in net sales per hour to break even. How on earth am I going to get that? I'd better fire one of them so I can use his income to pay the other one...

Except I don't have to because EVERY OTHER MINIMUM WAGE WORKER in my country is also making an extra $114 per week, now. They have more money to spend at my business, helping me to effectively meet my overhead.

You know what Bush's people found out after Bush's tax cuts? If you give more money to struggling families, they don't place it in the stock market or long term savings like the 1% do. They spend it. Immediately. They fix their cars, they pay their overdue bills, they buy clothes their kids need and shoes without holes in them, they buy food for the first time in two weeks... which is all great for the economy. The same thing will happen WHEN we raise the minimum wage.

AliPa... AliParker

I agree with Shannon. And while i see your point, in the long run and for everyone else I think it would be something to look into further. You are only looking at it through small business owners eyes. What about the college student working to pay for school? What about the family that needs a little extra help and instead of getting on welfare they get a minimum wage paying job. No plan is ever perfect. There are pros and there are cons. You just have to look at what the better of the two would be. I for one think it could be a great idea.

Mark Cox

its true marley..sometimes compassion is telling truth not throwing money..sorry that bothers you..we have had a 50 year war on poverty and spent over 20 trillion dollars but yet the poverty rate has barely moved...but its funny that obama raises minimum wage while women at white house earn less than men and while 210 of those signed onto to the house bill have iterns they dont pay

Mark Cox

interns*

nonmember avatar blue

I don't usually agree with you, but I also think it's a bad idea. Minimum wage and menial jobs were NEVER meant to be a living wage. They were never meant to sustain families. The correct thing, is not to make a living wage out of a menial job. You don't even have to be literate to work most menial jobs, for god sakes. $10 is a really fantastic wage for where I live. (Very low cost of living.) Do you really think the usual people are going to be working at Mcdonalds? No, skilled and educated people are going to take these jobs, because it's a great wage when you're out of a job. So, then all these other people are making nothing. It makes NO sense to raise a non-living wage job. It's NOT MEANT to live on.

2cent... 2centsCDN

Wow, what a sad lesson your father gave you. He taught you to value money over morals. My father was also a small business owner and he cared for his staff, no one was ever let go because minimum wage went up.



Why aren't minimum wage jobs meant to be a living wage? Just because someone isn't ambitious enough to get a job in the business world or be a blog writer they don't deserve to make ends meet? Some people are happy just having a job and not a career.



What a sad, elitist attitude.

nonmember avatar blue

Minimum wage jobs were not created to be living wage jobs. The fair labor act was created, so that people (and children) weren't forced to work for almost nothing. So they weren't exploited. It was to create a standard and make working fair and equal. It was not meant to lift people out of poverty. Minimum wage jobs are menial. No skills are required. Literally, anyone can work them. They are jobs for those who can't get jobs anywhere else. NOT jobs to take poor people over the hump. Menial jobs will never be living wage jobs. It has nothing to do with being elitist. It has nothing to do with "ambition." The facts are, minimum wage increases have never brought people from poverty, and never will. The people living in poverty are there, because of circumstances that minimum wage does not fix.

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