Nonsequitur: How Minimum Wage Increases Really Work

January 7, 2014

I live in a state on the western coast of the US where the state minimum wage has just increased. (It was already higher than the federal minimum wage.) My teen-age son is lucky enough to have a job that pays minimum wage, so he’s getting a “raise.” The restaurant he works for has also just raised prices on all their items to pay for this increased business cost. This is happening at a lot of small businesses that my son frequents as a customer. While he’s making more, he’ll have to pay more for the things he buys. Did raising the minimum wage give my son more spending power? No.

I did not get a corresponding “raise” in my non-minimum wage. But I am still affected by the higher prices at small businesses (and big businesses who get supplies and services from small businesses) brought on by this increased business cost. Did raising the minimum wage increase my spending power? No. In fact, the net affect will be more expenses for my entire family.

Minimum wage jobs are a starting point for most workers, not a long-term means of self-support. Raising minimum wage will probably have no real positive effect on those making minimum wage, but will have a real dampening affect on economic growth. It may make a small bump in tax revenues, but mostly it allows politicians to pretend that they are doing something about our stagnant economy.

By the way, people without jobs don’t make minimum wage. The minimum wage increase proposed by the president will do nothing to create jobs for the millions of Americans who are looking for work. In fact, it may hurt.

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One Response to “Nonsequitur: How Minimum Wage Increases Really Work”

  1. […] Don’t believe me? You don’t need to. Just pay attention to places that are already mandating a high “livable wage” like San Francisco or Seattle or Portland Oregon. […]

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