It’s A Wal-Mart World – or Why The Minimum Is The Minimum

Here in California, the state legislature passed, and the governor signed into law, a provision to raise the state’s minimum wage – first to $9.00 per hour, and then to $10.00 per hour a year later.  When Governor Brown signed the bill, he said it was “a matter of justice.”  He could not be farther from the truth.

Like most Americans, I have worked my share of minimum wage jobs.  I flipped burgers at McDonalds.  I interned at my church (for a stipend that was actually lower than minimum wage).  I worked shipping & receiving for a local small business.  I stocked the shelves at PetsMart.  I made salads for a pizza restaurant.  Each and every one of these jobs had something in common: they were the lowest jobs on the totem pole.

In some of these jobs, my only goal was to get a paycheck so I could pay the bills.  Typically in these cases, I always had my eyes open, looking for something better…and if I was working a minimum wage job that I hated, such as handing out food through the drive through window of a fast food joint, I made my tenure there as short as I possibly could.

This is the thing that proponents of constant minimum wage increases just don’t seem to understand: Minimum wage is a starting point, not a lifestyle.  When I was going to college, I worked two part-time jobs to make sure I could cover the rent and the bills.  I worked hard at those jobs, because I knew that if I excelled and my managers were fair, there would be raises, and possibly promotions in my future.  But at no point did I contemplate the idea that those ventures would lead to a long-term career.

These days, there are lots of people stuck in part-time, minimum wage jobs – many of whom have the qualifications to do and make more.  It’s called underemployment, and it seems to be the new normal in the Obama economy.  And as leftist policies continue to keep our economy depressed and push more and more people into underemployment, raising the minimum wage isn’t a matter of justice for the politicians, it’s a matter of political strategy.  Just like with the never-ending extensions of unemployment benefits, or loosening of restrictions on welfare, the minimum wage just becomes one more area where Democrats make people dependent on government for their livelihoods.  Push the people into part-time, low-paying jobs, regulate away their prospects for advancement or for finding real jobs, and then legislate the only pay raises they’re likely to get.

Fast Food group with bannerThe biggest problem with this method of operating is that raising the minimum causes inflation throughout our economy.  Raising the minimum wage means that all kinds of other things, which are indexed based on wages, become more expensive.  It becomes more expensive for companies to hire new workers, as they have to pay higher wages, higher payroll taxes, higher worker’s comp rates, higher unemployment insurance rates.  Companies are responsible to their shareholders or boards of directors, and have to make profits – that’s what business is all about, after all, so they have to raise prices.

Then we also have union wages, many of which are also indexed from the minimum wage.  So your plumbers, electricians, teamsters, service employees, etc all get their own bump in pay, making their services that much more expensive.  Then throw in the public employee unions, and we all end up having to pay higher taxes, on top of higher prices, just because some politicians passed a bill to raise the minimum wage.

Then all you have to do is give it a few years, until the system inflates and equalizes again, and then $10 per hour just won’t be enough, and we’ll be treated to the same cries of injustice and unfairness, and the push to raise the minimum wage will begin again.

We don’t need to raise the minimum wage – in the end, it accomplishes nothing.  What we need is a society willing to work hard for what they get, and a government that will get out of the way so that the market can grow and expand.  We don’t need a government that stifles the economy until the only jobs people can get are part-time, minimum wage gigs standing behind a checkout counter at Wal-Mart.  We need a government that respects freedom, including and especially economic freedom.


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