The last time the minimum wage was increased was 2007-2009. I remember having a conversation with my son who had a minimum wage job around that time. He was excited because he was going to get a raise. I told him to enjoy it while he could because forcing employers to pay a minimum will have unintended consequences because it goes against the market. He gave me a look that said "Yeah, whatever, what do you know dad" and he went his merry way. Just a few short months later he was unemployed and we were in the midst of the greatest recession since WWII. You can't go against the market and win. The market finds a way to get what it wants every time. In this case, the market for low or non skilled workers will only pay a certain amount. If you raise costs arbitrarily, the market will compensate by either hiring fewer low or non skilled workers or find a way to not use workers at all (like the rise in the use of robots or outsourcing jobs to another country). If there is no other way around the wage increases, businesses just close their doors if they can't afford the extra costs. The market always wins! I believe that raising the minimum wage arbitrarily will also eventually trigger a recession. Is that what we need right now?
What do you think?
No comments:
Post a Comment