Fear for an increased minimum wage
The democrats won the election Tuesday. They won big. The American people voted, and chose the democrats. Come January, the Democrats will be in control of both houses of Congress. Among the most important parts of having a congressional majority is the ability to set the agenda. Soon to be Speaker of the House, Nancy Pelosi is already setting forth her agenda for the upcoming two years. Her very first piece of business is raising the minimum wage, which she hopes to do within her first hundred hours.
Speaker-elect Pelosi has proposed raising the minimum wage from $5.15 per hour to $7.25 per hour. It sounds great doesn’t it? That means anyone currently making below $7.25 will make more money, right?
Actually…No.
If a company has to pay their employees more, then the company has less money. Owners, CEOs, and Investors will not accept less money from their company, so instead they will cut back on labor hours and possibly lay off some employees. In essence, employees who were previously making below $7.25 per hour might now be out of a job.
The Macroeconomics text book used by this college states that 79 percent of economists believe that raising the minimum wage results in unemployment of young and unskilled workers.
I’m actually going to be directly affected by this proposal. I work intramurals as a part-time job here, and like most student employees at this college, I am making below the $7.25 proposed minimum wage. I should be all for this measure since it would effectively mean a pay increase for me. But I’m not for it because I realize that if intramurals has to pay their employees more, then they will have to greatly cut back the sports and events offered. This means my intramural friends and I would be left with very few hours.
This bill won’t hurt huge corporations like Wal-Mart because they already pay their average starting employees well above this proposed hike. But this law would really hurt mom and pop shops that hire a local 15-year-old to stock their shelves.
If you take a look at the history of the minimum wage, it is apparent that we aren’t due for another hike for a good many years. When the minimum wage was created in 1938 it was $0.25 per hour. That is $3.22 in 2005 dollars. Meaning that the minimum wage at the present seemingly low sum of $5.15 is actually relatively high.
Liberals, in particular, salivate over the socialist utopia of Switzerland. Switzerland is no stranger to government regulations of people and business. However, in Switzerland there is absolutely no minimum wage. Nine other European nations also leave employee wages to be decided solely by the employee and employer.
Sadly, though, this bill will probably pass. President Bush has already made it clear that he would sign (it’s not like he knows how to veto anyway) a hike in the minimum wage. Numerous Congressional republicans will probably rally with democrats to make it look like they are giving the poorest of Americans a raise. In reality, they will be giving them a pink slip.
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Posted by Colonnade Archives
on Dec 1 2006. Filed under Opinion.
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