Tuesday, December 19, 2006

Businesses to Raise Prices on Goods and Services With Minimum Wage Increase

This article in California points out the consequences of artificially raising the minimum wage as opposed to allowing the free market to work it's magic. Payroll is businesses largest expense and when they are forced to raise that expense by 11% in California, for example, they pass on that expense to their customers.

With an increase in minimum wage comes an increase in goods and services which negates that "raise" that the minimum wage worker receives. Their buying power basically remains the same as it was before their increase. Liberals next move should be government mandated price controls on business so these poor repressed people can get ahead. We need socialism!

This goes back to my point that an employee that is always a minimum wage worker is only worth minimum wage. That is their value to an employer. If that employee exhibits greater value to the employer, that employer will pay the employee more. Employees that only rely on mandated minimum wage increases rather then their own abilities are simply not good employees and only worth what they are paid.

While this article is from California, I know many businesses in Missoula will be raising their prices when our minimum wage law goes into effect. With the increase, most everybody's wage will need to be increased but with that, of course, comes price increases on goods and services which leave everybody right where they started.

So for those who felt good about themselves when they voted for I-151, they really didn't accomplish anything. Just the smug feeling that they were good people helping those less fortunate.

This is Liberalism - support those things that make you feel like you're helping but not those difficult things that really do help.

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