Does Anyone Understand Economics Today?

Jan. 28, 2014
By raising the minimum wage just because it will make him look good during the State of the Union address, President Obama continues to do nothing good for the economy. 2016 can't come soon enough.

The minimum wage is meant to be a wage for people just "starting" out in the work world, or for jobs that don't merit higher wages, as those earned by persons with higher levels of schooling (but that doesn't mean minimum wage earners are stupid.)

For liberals, raising the minimum wage is the easiest way to make political points. What cold, heartless person (who probably voted for Bush!) would dare deprive someone raising a family a wage that is near "poverty" level? Well, anyone who really understands economics, that's who.

Artificially raising wages costs consumers. Oh, you mean those evil rich people like the Bushes, Mitt Romney, John Boehner, and the Koch brothers? No, I mean everyone, including the person who just got the raise! It's called higher prices. The price of goods and services necessarily go up.

From Thomas G. Brown, writing for the Independent Voter Network (IVN): "Increasing the minimum wage may sound good but if we think about the issue economically, we might conclude that raising minimum wage really does not do anything but raise the cost of labor artificially, costs that employers pass on to consumers by raising prices, which leaves laborers paying more for the things they need, canceling out or even overshadowing the effects of their wage increase."

Even though President Obama's latest grand, politically motivated executive order to raise the minimum wage to $10.10 for new government contract employees benefits a very small group, it brings to mind what this guy has in mind: cut benefits to the military, raise benefits for people who vote Democrat.

If automatic higher wages are ideal, let's give everyone $50,000 a year. (And of course, next year even that wouldn't be enough.)

What does raising the minimum wage on the government's timetable do to your HVACR business's ability to keep your supporting staff  employed? Let me know when you 'got a minute.'