The Black Informant

Mininum Wage Fraud — Craig Chamberlain

(theconservativevoice.com) Congress, desperate to actually accomplish something, managed to get the mininum wage raised to 7.25 an hour, and they only managed that by tying it in with funding for the Iraq war. Too bad an increase will not help anyone, and will probably cost a lot of mininum wage earners their jobs.

Now I suppose that there are some people who truly and honestly think that increasing the mininum wage will help those making it. They might be moved by compassion because of the story they see on the six o’clock news where the news station manages to dig up the three people in town who have to support a family on the mininum wage. For most people, however, supporting a mininum wage increase is either political opportunism, economic illiteracy, or a desire to spread class warfare. Sometimes it’s all three.

Labor, like anything else a business has to spend money on, is a cost. When a cost goes up in one area that business must offset it either by raising prices, and thus passing the burden of this wage increase onto the consumer, or by cutting the costs that have gone up. In this case that is labor. By cutting labor people will be laid off, and fewer people will be hired.

The bad economics behind the wage increase does not stop Congress from being proud of it. Ted Kennedy said the achievement was one of “the proudest of this new Congress.” What’s that say about Congress when they are more proud of a pay raise that will cost people jobs than they are by, say, funding the troops?

The left leaning Economic Policy Institute estimates that 5.6 million people, which is about 4% of the workforce, earn less than 7.25 and hour, the new mininum wage. Now if only 4% of American workers in the mininum wage that would mean that the other 96% earn more than that. But to hear Congress you would think that they just saved the American economy. (more…)

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