Minimum Wage Increase; Maximum Waste of Opportunity
by: Jamal Thompson
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My first job was as a snack bar attendant in a popular department store for minimum wage. Every day I popped hot buttered popcorn and poured ice cold carbonated drinks for famished shoppers. There were 11 of us total in the snack bar with 3 full time employees. At the time the minimum wage was .25/hr. After it was raised to .75/hr there were only 8 of us total with only 2 full time.
This scenario plays itself out thousands of times every time government sees fit to raise the minimum wage.
What is most disturbing is that Nancy Pelosi and the new crop of democrats in the House of Representatives are planning to destroy thousands of employment opportunities for low skilled workers by imposing a 40% minimum wage increase form .15/hr to .25/hr within their first 100 hours of taking office.
For those states that have already increased their minimum wage above the proposed level, very little will happen. Those states have already destroyed those opportunities. However for those states that let potential employers and employees agree on an hourly wage, the unemployment rolls are going to swell.
The basic law of supply and demand states that all things remaining constant, if the price of a good or service increases, less of that good or service will be demanded. This is the most basic, elementary premise in all of economics. It is as integral to economics as the alphabet is to literacy. It is a law of reality as immutable as gravity and just as ubiquitous. It just is and will continue to be as long as humanity remains free to trade goods and services.
Of course you don’t have to take my word for it. Governments and authorities have instituted minimum wage laws countless times in many countries all over the globe and wherever and however they have been tried they tend to produce the same result. But there is one place where they have been particularly successful.
During South’s
However the officials of the Apartheid government had a much better understanding of basic economics than Nancy Pelosi because the Apartheid officials realized that increases in the minimum wage would eliminate employment opportunities for low skilled workers which were for the most part black.
Gert Beetge, secretary of South Africa's avowedly racist Building Worker's Union, in response to contractors hiring black workers, said, "There is no job reservation left in the building industry, and in the circumstances I support the rate-for-the-job [minimum wages] as the second best way of protecting our white artisans." Racists recognized the discriminatory effects of mandated minimum wages.
Even Joseph Stiglitz, former chief economist for President Clinton, wrote, "A higher minimum wage does not seem a particularly useful way to help the poor." Someone needs to mention this to Nancy Pelosi. I don’t think she got the memo.
But aside from the practical application of losing jobs, there will be a human toll as well. An individual learns a lot more at his first job than how pop popcorn or pour carbonated drinks. He learns responsibility, work ethic, punctuality, teamwork, leadership, priorities, and even a degree of money management. All of these traits are important not only as he continues in his professional career but acquiring these traits early in life can be a tremendous advantage to a young individual with few other remunerative skills. A raise in the minimum wage will delay this maturation process for thousands of young individuals.
Also some people work certain jobs more for the experience than for the income assuming the experience they gain and the skills they learn will position them to command a much higher salary in the future. This type of apprenticeship used to be common amongst those with all levels of schooling in order to provide them a greater opportunity to benefit later on. Unfortunately, minimum wage laws are reducing these opportunities for lower wage workers.
In short the racist Apartheid government officials seem to understand the nuances of the supply and demand model better than Nancy Pelosi and the democrats but what is worse is that in their ignorance, the democrats are planning to destroy thousands of entry level opportunities. The action is not in question; they will raise the minimum wage. The result is not in question; entry level employment opportunities will be lost. Who will be affected is not in question; those who most need the work will lose the opportunity. The only question is whether they will do it with full knowledge of the consequences or in ignorance of the human fallout. To me it doesn’t matter. It’s bad economics either way you look at it.
About the Author
Jamal Thompson is a Financial Planner in Valencia, CA.
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Comments
There is a bigger picture and the Bible says be content with what you have,and should someone compel you to go a mile go two not complaining.
Everything has a reason, we as people have a place and for some reason we as a people always want to be something or even someone else. WHY? where does this desire come from?
Greed, Jealousy, envy and so on.
Governments do not get anything right its not possible and common sense tells you that two wrongs do not make a right.
They have since the Bible has so subtily been squeezed out got it so wrong.
Do you think if I took a rotten blighted potatoe and got a professional painter to make it look real and perfect I would get away with it? yes I would then what? its still rotten, covering over anything only brings more trouble and unfortunately when it comes to giving the last to get are the poor working men, us.
So if you have a roof water clothes food and heat you are much better off than four billion people at least on this planet right now. Lay not your treasure up here on earth....
Oh and most important of all Your Health.. if you have that then you are a millionaire already, or should feel like one.
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What is this last comment about? Are you saying everyone should be content with where they are at now and not strive for something better? I don't think minimum wage should be raised. If it is raised there should be major taxcuts for business.
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I must be missing something here.. It's OK for Government officials to give themselves a wage increase at every opportunity... It's OK for Cooperate leaders to approve higher and higher wages and bonuses and retirement plans for themselves... In the 1960s a family could survive on a one breadwinner income, Not anymore.. One parent families just survive..
Other wise it takes both parents working to gain ground leaving children behind in the family unit contributing increased youth problems... Yet it is NOT OK for the American worker to seek a minimum wage increase... HOW DARE YOU... What makes the workers who build this land of opportunity not worthy of a fair compensation for work done...
If you check your history sir you will find that minimum wage increases DO NOT have a lasting effect on job opportunity.. That is a fallacy. Minimum wages have been held at a standstill for 10 years.... While those holding wages down for the poorest in our land gave themselves wage increases... Justify sir.. Justify.... America is a great land but its history is full sir, I said full of injustices of the rich cooperate world holding the worker down in sharing the wealth of this great land.... Don't try to justify this to the working man.. I said working man not the politials or cooperate chair riders.....
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