DRAFT: The Minimum Wage Lie

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<p>The (stated) argument for minimum wage is how unfair it was because you couldn&#8217;t live or feed your family off of it and it hasn&#8217;t increased over the years to match inflation.</p> <p>&#160;</p> <p>Ok, both of those are true, but the premise of the argument is a lie.</p> <p>&#160;</p> <p>If leads one to believe that many people are working minimum wage and trying to support families and this is causing extreme hardship.&#160; This simply isn&#8217;t the case.</p> <p>&#160;</p> <p>Less than 5% of the total work force works for minimum wage.&#160; Of those less than 5% use it as a &#8220;living wage&#8221; to support themselves or families.</p> <p>&#160;</p> <p>Typical minimum wage jobs are low skill entry level positions. They are frequently used by teenagers and are often the first taste of &#8220;responsibility&#8221; and &#8220;accountability&#8221;.&#160; Extremely important concepts for life as well as future employment.</p> <p>&#160;</p> <p>What happens when you raise the minimum wage?&#160; There is always a net job loss.&#160; Labor costs are one of the largest costs facing an employer.&#160; When wages go up, employers have to make up the extra expense somewhere.&#160; They either have to raise prices, or cut labor.&#160; Innovate with automation.&#160; Sometimes all of the above.</p> <p>&#160;</p> <p>So minimum wage workers are squeezed out of the labor market and replaced with automation, or hours cut, all providing fewer job opportunities.</p> <p>&#160;</p> <p>What happens next?&#160; The rising prices mean everything costs more so someone who made $3/hr and is now making $5/hr may sound great, but everything they are buying costs more, so they make more money (and pay more taxes), yet have NO GREATER buying power.&#160; Their standard of living does not improve at all, or very slightly at most.</p> <p>&#160;</p> <p>This is why there are constant calls to increase the minimum wage.&#160; Thinks keep costing more so employees need to make more.&#160; A vicious cycle &#8211; or so it would seem.</p> <p>&#160;</p> <p>So why is there this constant push for raising the minimum wage?&#160;</p> <p>&#160;</p> <p>Well, it is really quite simple once you know the facts.</p> <p>&#160;</p> <p>Private sector unions negotiate with the companies they are employed in for contracts.&#160; Public sector unions (government unions) negotiate with politicians for their contracts.&#160; This difference is subtle, but significant.&#160; Public sector unions aren&#8217;t negotiating with their employers.&#160; Their employers are the taxpayer, not the politicians.&#160; This is where the incestuous relationship comes in.&#160; Unions donate to politicians to keep them in power, politicians negotiate better contracts for unions for those donations.&#160;&#160; It is a never-ending cycle. &#160;This is why public sector unions are most prevalent in democrat-controlled cities and states.&#160; While there are many progressive republicans, by and large, Republicans aren&#8217;t trying to expand the public sector. &#160;Even FDR, a huge unionist thought public sector unions were immoral and should be illegal.</p> <p>&#160;</p> <p><strong>Now here is the little-known catch.&#160; Almost all public sector union contracts are tied to the minimum wage.&#160; No matter what a member of that union makes, when the minimum wage goes up, they get a proportional raise!</strong></p> <p>&#160;</p> <p>So - the democrats push for minimum wage increases, when they happen the unions make more money and in return donate more to the democrats.&#160; The cycle is never ending.&#160; This is why unions like SEIU, NEA, AFT and so many others donate so much to democrat campaigns at all levels.&#160; When you look at top campaign donators, it is always union donations dominating the top 20 list.&#160; As much as you hear about those evil Koch Brothers, they typically aren't even in the top 25 in donations</p> <p>&#160;</p> <p>This is why so many state pension funds have exploded and why so many states are on the verge of bankruptcy.&#160; But the democrats keep demanding the wage goes higher.&#160; If/When they get $15/hr, it won&#8217;t be long before they are demanding $20/hr &#8211; because of course inflation and cost of living with have been driven up, but of course they won&#8217;t point out it is because of the increased labor costs.&#160; It never stops!</p> <p>&#160;</p> <p>When you create an artificial wage, the free market must compensate for it.&#160; The market should always determine the wage, not the other way around.&#160; Government meddling in the free market is what causes most of the complaints about the failures of the free market, not the free market itself.</p> <p>&#160;</p>