Minimum-Wage-101

California Minimum Wage Is Raised AGAIN. And This is Who It Hurts the Most. [VIDEO]

The government is about to raise the California minimum wage and it will hurt the poor the most.

The California minimum wage will go up, but so will prices and unemployment.

This short news report sets out the three results that occur if the minimum wage is increased: less employment, lower profits, and higher prices.

The report says that these effects are what critics of raising minimum wage warn about. This is how it makes raising the minimum wage look more plausible. If this report dealt with skepticism of global warming, it would tell us that “most scientists” believe in global warming. Likewise, most economists acknowledge the consequences of minimum wage. By referring to them as “critics” the media makes them seem like ideologues instead of scholars.

But anyone who thinks about the issue rationally, realizes that raising the California minimum wage would have to result in higher unemployment, higher prices, and probably lower profits.

Less employment.

Activists who want people to not use tobacco or to drink less soda have one solution that they think will change people’s behavior: raise taxes on the unhealthy substance so that the price is raised. The principle is simple. If you raise the price of x, then people won’t buy as much of it. So why can’t these same people understand what must happen when you raise the price of labor? It isn’t hard to understand. Businesses will hire fewer people.

The people with the least education and experience will be hardest hit. If shoppers had to pay rib eye prices for ground beef, more shoppers will buy rib eye steaks.

Higher prices.

If all businesses must pay their employees more money for the same amount of labor, then they will have to raise their prices to cover their costs. When prices are higher, wages will no longer purchase as much as they did before.

Lower profits.

Yes, the wealthy will get hurt by minimum wage, but they will make decisions to reduce the damage. They will cease to start new businesses in California and invest in other locations in the country. As restaurants and stores are driven out of business, no new ones will replace them.

Conclusion.

The minimum wage needs to be abolished, not raised.

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Joe Scudder

Joe Scudder is the "nom de plume" (or "nom de guerre") of a fifty-ish-year-old writer and stroke survivor. He lives in St Louis with his wife and still-at-home children. He has been a freelance writer and occasional political activist since the early nineties. He describes his politics as Tolkienesque.

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