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Minimum Wage vs. Living Wage

1/1/2019

 
Minimum wage is a sensitive topic, but here’s my take on it: Our economy has never been built around a minimum wage being a "living wage." I worked part-time jobs in high school and then joined the Navy, so I could take care of myself. I then left the Navy, got married, and worked part-time jobs while getting my college degree. My wife Maggie (who had already graduated from college), worked a full-time job to keep us afloat.
 
Neither of us, ever thought we could work minimum wage jobs and get ahead in our lives. I had to graduate college to make myself more marketable because I didn’t have a trade from which I could rely. We both wanted a home and a chance at a decent retirement. We both wanted to make our parents proud.  
 
Some of the companies on the west coast that increased their minimum wage to $15 an hour, found out quickly that it didn't work. It of course didn't increase their profits (why would it), so the added costs made it to where they had to make some quick changes to survive. Some of these companies not only stopped hiring they ended up laying off some employees creating a worse experience for their customers.
 
If companies try to keep their profits were they were before raising the minimum to $15, through raising prices on their products or services, they more than likely will lose customers to other businesses or in the case of what happened to Starbuck's when they increased their hourly rate, people started brewing coffee at home more and taking it to work. They'd still go to Starbuck's, but the number of visits decreased. I don't need to tell you that when sales go down and costs go up, it's not a formula for success.
 
Let me pick on California (which I love to do), for an example. Their minimum wage is all over the place with some cities now pushing for $16 an hour. They can do whatever they want in their state but have you ever asked yourself why they lobby so hard to have the national minimum wage rate raised?   They know if other states aren't forced to raise their minimums drastically, then California would become even less attractive than they are now in reference to the costs of their products and services. They also know that they'd lose even more companies to other states. Not only because the corporate tax rates being higher, but also because companies need to be competitive price wise. The costs of living in California, including having outrageous state gas taxes, is extremely high so of course they need to try and increase the minimum wage. 
 
Forcing, through Federal Law, businesses across the country to give their employees $15 an hour so they can have “living wages,” would destroy our economy. Not every state is the same as California. Just because through mismanagement, Democrats have jacked-up the costs of living there, it’s not the same everywhere else. You can make $9 an hour in Louisiana and end up with a better overall lifestyle than $15 an hour in California.

The fact is that it's not just an issue of prices between states. We compete in a global economy. For example, unnecessarily increasing product costs for a company in Alabama that  is competing against companies in other countries, isn't fair to them or their employees. Believe me, workers would rather make $11 an hour and have a job for several years then make $15 an hour and have the company close down or lay some of them off. States like California, Illinois, and New York, should not dictate how business is done everywhere else in the country; the market needs to dictate the hourly wage.  

I'll reiterate my first point, never in the history of capitalism in our country, has a minimum wage ever been used as a living wage. I couldn't live off minimum wage so I pushed myself to become better, to become more marketable so I could make the kind of money I needed to have the things that I desired in life. Minimum wage is a motivator. There's not a singly economist who could legitimately explain how raising minimum wage all across the country, would in the long run benefit our nation when we're dealing with a global economy.

If states that have hurt their citizens through creating outrageous costs of living, want to make matters even worse by jacking up the minimum wage, then that's up to them, but to try to take the rest of us down with them, is immoral.

 

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    Author: John Mann

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