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