Some progressive tax dodge called Raise The Wage Indiana just posted something on Facebook lauding Kentucky’s governor for enacting by executive order a $10.10 minimum wage for certain state employees. Bully for Kentucky. Not so bully for Raise The Wage Indiana, which isn’t making it clear that this is a restricted increase and doesn’t apply to the mass of poor, downtrodden Kentuckians who must live on the minimum wage of $7.25/hour.
Problem is, nobody ever said Kentuckians were smart.
The minimum wage is NOT A LIVING WAGE and isn’t supposed to be. It’s supposed to be a floor for no/low-skill, entry-level jobs. Jobs like when I was a stockboy at the hardware when I was in high school. Jobs like asking if you want fries with that. Jobs like writing up your car wash and blowing the bugs off the front of your car as you pull into the doorway. Jobs like sweeping the floor at the local grocery. Jobs like flagging cars around work areas. (Oh, wait, flagman is a union job. Never mind.)
The point is that nobody is actually supposed to be making an independent living off of the minimum wage, and typically minimum wage jobs aren’t full-time anyway. So even if it sounds like a minimum wage job at $15/hour (as was enacted in Lost Angeles* a few weeks ago) pays $30K/year, it probably doesn’t come anywhere close to that — and since when is $30K a living? Maybe it was in 1994, since that’s what I was making when I went to work in a skilled technical job that year. But that isn’t what I make today.
I don’t think that part-time, entry-level, no-skill workers ought to be paid slave wages, mind you, but I am not certain that they are worth what I got paid for a skilled technical position back in 1994.** The fact is that raising the minimum wage is going to put people out of work. I realize that concept is hard for some people to fathom, too, but the bottom line is, well, the bottom line. Employers (well, employers who want to stay in business and make money) have a budget that contains a line for wages. That budget line is set based on what each job is calculated to be worth.***
If the budget allows for 10 workers at a minimum wage of $7.25/hour (Indiana’s minimum wage which went into effect on July 1, 2014), how many workers does it allow for at a minimum wage of $15/hour? I’ll leave that as an exercise for the student. Please show your work in the comments.
Please don’t try dodges like “well, the business owner needs to increase the budget for workers,” or “the business owner should simply pass that along to customers.” Because it doesn’t work that way. If the business owner increases the budget for workers, either he has to take a hit from his net profit, or he has to shuffle budget money from other lines. That may mean that the new burger grill he was going to buy this year will have to be bought next year. If too many burger places do that, that puts someone out of work at the burger grill manufacturer due to lowered production targets.
If the business owner passes along the increase to his customers, the price of his products go up a few cents each. Eventually people notice this and maybe they elect to have a water instead of a soda. (The price of a fountain drink is outrageous these days to begin with. No fountain drink, even with free refills, can possibly cost $2.39 to produce. I’m looking at YOU, Applebees, but other restaurants are equally guilty.)
So what is the business owner’s best option? Simply to cut labor costs. In this case, it means either cut hours or cut employees. Either way it means working with reduced staff and that will reduce efficiency and make for headaches when trying to work out the staffing calendar. I have worked out staffing calendars with reduced staff. It is not fun.
People like the proggie operatives who work for shill mills like Raise The Wage Indiana don’t want you to think about that. They carefully leave out the consequences of raising minimum wages (or having them at all — the need for them is doubtful at best in a free market) for the feel-good high of “doing something for the downtrodden” — a typical progressive refrain that has, frankly, grated on my ears ever since I became politically aware during the Carter Administration.
As usual for proggies, it’s a case of “We have to protect our phoney baloney jobs here, gentlemen! We must do something about this immediately! Immediately! Immediately! Harrumph! Harrumph!”
Nah. In a free market with a growing economy, rising water floats all boats. The problem is that the proggies are lying about the market being free and the economy being on the rise. If that were actually true, we wouldn’t be worrying about the minimum wage.
PS: Sorry, I have updated this a couple of times to make corrections. I am in the throes of chronic bronchitis and just got antibiotics yesterday, so of course today it is much worse than yesterday as everything wants to come out at once instead of being stuck down in my chest where it doesn’t belong but at least wasn’t actively trying to kill me (just passively). My apologies for any errors I may have committed and have since rectified (and possibly even transformed).****
* Not a typo.
** Yes, I understand the concept of natural price inflation. I also understand the concept of forced inflation due to proggie government stupidity. There’s nothing wrong with the former, as it probably indicates a healthy, growing economy. The second is just moronic and there is no reason for it other than protecting phoney baloney political jobs.
*** Or in the case of minimum wage jobs, the minimum wage — I will not admit that all jobs are worth the minimum wage, otherwise there is no point to this post.
**** Yes, my sense of humor gets worse — much worse — when I am sick.