Higher Minimum Wage Isn’t Answer
Published: September 3rd, 2013
By: Tom Morgan

Higher minimum wage isn’t answer

A bunch of fast-food workers went on strike for a day this week. To call for lifting the minimum wage in their state. From $7.25 to $15.

It’s easy to mock them. And at least one big newspaper did. It asked "If $15 is a good idea, why not raise the minimum wage to $100 an hour? Or $200?"

(Senator Elizabeth Warren of Massachusetts wants it to be $22. But she's the gal who calls herself Native American when she isn't. So we expect a little unrealistic thinking from her.)

Liberal politicians like Squaw Elizabeth love to promise higher minimum wages. To buy votes. And it's not their wampum. It's not even taxpayer wampum.

They tell rich people (employers) to give more of their money to poorer people (workers). How many votes are up for grabs among those workers versus those employers? No brainer.

Then there is reality: If we are forced to pay a guy $200 an hour to sweep floors, we won't. We'll buy a robot. The guy will be out of a job.

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There is a further reality: Around the world companies hire an army of folks at low wages. To make cheap products. For low wage folks to buy.

Those fast-food workers toil in the midst of this reality. McDonalds prospers because it sells burgers and fries for cheap. It thrives because there are millions of folks who can only afford cheap food.

Suppose McDonalds is forced to pay workers $15 an hour. This would raise the price of the burgers and fries. Fewer folks would eat at McDonalds. So fewer workers would have jobs there. Simple as that.

Apply that across the landscape. Workers at Coke would earn the $15 an hour. As would the workers at the french fry company. And at the potato farm. And at the bun bakery. McDonalds would be selling the new Big Mac and fries for $20.

So ... would all these workers making $15 an hour buy the new Big Macs? Maybe on special occasions. Methinks McDonalds would have to become Chez McDonald. Offering Le Mac Grande. With wine, instead of that $6 Coke.

And methinks lots of folks who make minimum wage today would be out of work. And cooking hamburger at home.

Walmart is another part of this reality. It attracts more customers than any operation on earth. Because it sells products at low prices. Low prices made possible by the low wages Walmart pays. Low prices made possible by the low wages manufacturers and growers pay.

Let's say we forced radically higher wages into this equation. It would be like tossing sand into the workings of a watch.

Some politicians may call out for $15 minimum wages. And $22. And $200. But some also speak with forked-tongue.

From Tom ... as in Morgan.




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