The City of Los Angeles recently raised the minimum wage to $15 an hour. Although that figure won’t be reached for five years, it will mean at least a 66% increase in the cost of anything requiring human intervention. That would make that $2.50 Happy Meal you buy today cost over $4 by 2020.
President JFK would often say, “A rising tide lifts all boats.” So, does that mean everyone in Los Angeles can look forward to a 66% increase in pay by 2020? Dream on!
Even if everyone’s pay did increase correspondingly, as water seeks its own level so do prices – net gain: zero. But everyone’s income (notice I didn’t say pay) doesn’t necessarily increase with the minimum wage.
Employers now paying workers $15 or more per hour have little incentive to raise those wages – certainly not by 66%. Those on fixed incomes who are unable to supplement it may see a slight cost-of-living increase as inflation due to the minimum wage increase drives it up. It would be delusional to think it would even come close to 66% increase, though.
Will welfare payments increase too? That just means we all are going to pay more taxes.
Far be it from me to deny anyone a living wage. But why would anyone even want to make a career out of flipping burgers? Jobs like these should be for those entering the job market – kids in high-school or part-timers – not people planning to raise a family and retire on that job.
I am no economist, but it shouldn’t take one to see that boosting the minimum wage beyond all reason will only add to the suffering of the poor and drive those barely making ends meet now on fixed incomes into the ranks of the poor.
Fast-food workers and convenience store clerks may be elated at the new size of their paycheck. The giddiness will soon pass when they find they still can’t make ends meet by the next pay period because everything now costs more.
So, what is triggering this drive to increase the minimum wage? There may be some compassionate lawmakers that actually believe they are doing the poor and middle class a favor. If so, they need to rethink the plan and take a long hard look at the broader consequences of raising the minimum wage.
On the other hand, my analytical – and perhaps cynical – mind sees that with every raise in wages there is a subsequent rise in the taxes paid on that income. There is little more precious to politicians than taxes.
To those young minimum wage workers, I would give a bit of advice. If you haven’t planned for a career beyond what you are now doing, the boosted minimum wage is still not going to be able to support in anything but the minimum lifestyle. If you want more, prepare yourself for more. Get an education for a better paying career. Make yourself valuable, and an employer will pay you for that value.
With a 66% price increase, that Happy Meal won’t seem so happy anymore, and the check for a steak at a nice restaurant won’t leave much for a tip.
No comments:
Post a Comment