Taking a stand against raising the minimum wage is certainly not a popular position in today’s cultural landscape. That lack of popularity alone is the reason most people won’t even consider that there are serious consequences when the government gets involved with the free-marketplace. If you think the minimum wage should be done away with all together, you are likened to a heartless “one-percenter” who doesn’t care if people die on the street from starvation. However, there are real problems with the minimum wage and raising it only amplifies those problems.
Problem #1-Jobs and the wages paid for doing them, come from business owners, not the government.
Jobs are not a “right”, they are the natural outflow of a supply/demand economy where people exchange currency they have for goods/services they don’t have. Unfortunately, the popular opinion has no concept of how our economy works, so they think wages should be determined by the employees as opposed to the employer. When the supply of workers far exceeds the demand of employers, wages fall. When the government forces business to comply with burdensome regulations, like an increase in minimum wage, it may no longer make financial sense to hire new employees and they might have to fire current employees to comply. Proof of this is in the bi-partisan CBO report, which estimates at least 500,000 jobs will be lost as a result of raising the minimum wage from $7.25 to $10.10 per hour.
Problem #2-A large and growing illegal alien workforce depresses wages, keeping company profits bottled at the top.
To some, the term “illegal alien workforce” is offensive, but it is true nonetheless. Those who work in this country illegally are doing our nation and its citizens a triple disservice. First, since they are illegal, they don’t report their illegal working conditions to the authorities for fear of being prosecuted. This allows companies to get away with paying low wages to people who will accept them, instead of having to pay higher wages to compete for American workers. Second, the demand for these jobs is consumed by the illegal workforce, creating a greater supply of citizen workers who need a job, therefore all wages fall as a result of excess workforce supply. Third, since the illegal workforce still consumes public services without paying taxes on their earnings, they increase the tax burden on citizens, taking extra money out of the pockets of their citizen counterparts.
Problem #3-Social subsidies keep individual professional growth stagnant for lack of incentive to advance.
Did you know that American entitlement programs have wage earning limits and no working requirements? Social subsidies like welfare de-incentivize people from taking personal responsibility for their own career advancement and wage earnings. In America, someone who is entirely reliant on government assistance and minimum wage is provided with food, an apartment, transportation, phone, childcare, etc.; which means the poorest here live better than 95% of the rest of the world. If it’s easier to have other people pay for your basic living necessities, and work as little as possible, why wouldn’t you? The expansion of our social subsidy programs acts as an incentive ceiling, which holds down the personal and professional growth of our citizens, creating a growing unskilled labor force in a country whose economy is built on skilled labor.
There are more problems that I could talk about, but these are the most easily identified. So what can be done about all of this?
Solution #1-Scale back the government interference in business to a bare minimum.
Does government have a role in the free-market, yes I believe they do. There should be minimum standards for food preparation, workplace safety, financial reporting, etc. BUT when the government tells a company what type of people they have to hire, and how much they have to pay them and what products they can or can’t sell (yes we are talking about people like you King Bloomberg of NYC with your bogus large soda ban) they become a deterrent to business growth and entrepreneurship. Businesses spend their time trying to comply with government regulations instead of focusing on creating great products/services, taking care of their clients, and making a profit…which in turn will translate into more jobs. Worse yet, businesses never make it off the ground because of the regulatory environment. We need to grow job creation by getting the government out of the way.
Solution #2-Secure our borders, enforce our workforce laws, incentivize employers to do the right thing.
When we stop the inflow of illegal workers, our economy instantly starts improving. We have a path to citizenship outsiders should use, and it’s called legal immigration. Those that are employing illegal workers should be incentivized to self-report through positive reinforcement like tax breaks or lower penalties. If businesses self-report their illegal workers they will instantly create a huge demand for legal workers. This brings up wages for everyone because companies will have to compete for a smaller workforce. Now the employee has the upper hand, forcing wages higher. The lack of jobs for illegals will force them to either self-report and get in line for the legal immigration process or be forced to go elsewhere. This replaces lower wage illegal employees, with higher wage citizen workers.
Solution #3-Require drug testing, educational, working and time limit requirements for social subsidies.
The goal of our government programs should be to lift people up, not keep them down. Therefore all social entitlement programs should come with strings attached. The strings are attached to self-improving behaviors like being drug free, educated, and working. With minimum standards, we are forcing people to get some “skin in the game” by taking an active role in their own advancement. By placing time limits on benefits received, we are setting goals and a “light at the end of the tunnel”. This will force people to better themselves or have limited access to basic living necessities. This drastically improves individual lives and societal advancement in general. Imagine if all of our citizens were working, paying taxes, and investing in themselves educationally? Minimum wage wouldn’t be this big of an issue.