Tuesday, October 17, 2017

How A $12 Federal Minimum Wage Hurts ‘The Engine of the Economy’

What one thing could cut economic output by $2 trillion through the loss of 1.8 million jobs over the next decade?

Raising the federal minimum wage to $12 per hour.

Hey guys, Kristin Tate here to talk to you about what a bad idea it is to raise the federal minimum wage.

A new report from the National Federation of Independent Businesses is further evidence to support what we, as capitalists, already know.

Raising the minimum wage not only hurts employers, but employees as well, and the economy overall.

3.3 percent of all hourly employees earn the current federal minimum wage of $7.25 an hour.

A $12 minimum wage would increase cost of labor for those workers by 65 percent, with no guarantee that the value those workers bring to the business would increase.

Because that’s what wage should be measured on—the value you bring to the market place.

Here’s the cold hard truth: according to the report, 57 percent of the jobs that would disappear, as a result of raising the minimum wage to $12 an hour, would come from small businesses.

You know, those ones that you’ve been hearing politicians say power the economy?

Both Trump and Clinton have said they would support increasing the federal minimum wage. Clinton directly supporting an increase to $12 per hour, while Trump hasn’t been explicit about what amount he would want to enforce.

Look, minimum wage laws hold back businesses and workers.

Workers should be able to negotiate their wage based on the value they bring to the workplace and employers should pay based on that value.

Bottom line here, regulation like minimum wage stifles business and innovation. Let’s stop pretending that enforcing a minimum wage is actually going to help the economy.

Because it won’t.

  • Real Estate Guy

    Holy shit this is terrible. An Econ 101 course at a community college would disabuse you of this bizarre, unsubstantiated mythology.

  • MichiganFreedom

    How are the workers going to negotiate their wage? The businesses have all the power in the transaction. If you look at workers wages 40 years ago in comparison to the profit made by their employers you’ll find that companies have increasingly been taking advantage of the availability of people to gouge workers. If you really want to make a difference in the economy, influence the world to go back to one gender going into the work force while the other gender takes care of the home, and pay the workers according to their real value to the business. There are a lot of people in offices producing nothing.

    • J. Matthew Bennett

      It’s not necessarily true that business have all the power when it comes to the employer/employee relationship. If the employee is valuable, then he should be compensated accordingly. It might be true that his current employer may be unwilling to compensate him appropriately, but that is precisely why competition is so important in the marketplace. Insofar as the marketplace remains competitive, employees will always have the ability to bargain for a higher wage.

      It is also a fallacy to assume that workers are being taken advantage of by their employers today anymore than they were 40 years ago. It might be true that their profit margins have greatly increased, but that isn’t proof that workers are not being satisfactorily compensated. According to American Enterprise Institute, in the last 40 years, and after adjusting for inflation, the percentage of six-figure income earners has been increasing, while those making less than $100,000 has been declining.


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