Minimum wage increase not a solution for a better Calif. economy


On the Jan. 1, 2014, the California minimum wage will increase from $8 an hour to $9 per hour.

What a load of crap.

This increase is going to help no one; and everyone who has taken a basic macroeconomics course should understand why.

When a government creates artificial price floors and ceilings, it leaves little room for businesses to grow, fluctuate, and maneuver the natural business cycle.

The type of jobs that pay minimum wage are called unskilled labor.

This means that just about anyone off the street can be trained for a month or two, and do the same job as the next Joe Shmoe.

These people have less experience, less education, and little to no skills, so they earn less to the minimum.

Why should they deserve more?

It could be an entitlement issue.

Everyone thinks they are entitled to more money for the same amount of work.

I simply don’t understand that.

When businesses are forced to pay unskilled employees more than they see fit, then two things can and do happen.

Businesses will lay off those employees, which leads to fewer jobs overall, they also raise prices of goods or services (bye-bye $1 menus) or do both.

This helps no one.

It actually hurts the people who get the increase.

Raising the minimum wage will result in overall inflation of goods and services.

People who earn slightly above the minimum, say $9.50 an hour, will find themselves in the same situation they worked very hard and long to get out of.

Also, people who earned exactly the minimum, and got the raise, will be worse off because of the increase in prices.

It doesn’t just hurt the employed, it also hurts the not-yet-employed.

Minimum wage jobs are the epitome of summer jobs for teens — experience that can be used to get better jobs in their future.

Because of the greediness of low-skilled employees, however, it will be more difficult for teens, in or out of high school, to get jobs.

On the unskilled labor level, a one-dollar raise is a huge raise.

Businesses are going to have to find that extra cash from somewhere. Most likely, businesses will get it from laying off other employees.

This measure has already been passed, and it’s going to happen whether we like it or not, whether we are ready or not.

I hope everyone enjoys the inflation.

Budget carefully, because it’s coming.