As you have already heard, the President plans to devote the coming weeks to trying to increase the Federal minimum wage from $7.25/hour to $10.10/hour, and then peg future increases to the rate of inflation. During his State of the Union address, he described raising the minimum wage as the ‘right thing to do,’ and used plenty of anecdotal stories to try to convince you why 2.9% of the American workforce needs a 40% pay raise…
This issue is always a popular one and increasing the minimum wage always polls well.
However, President Obama’s vision is fundamentally flawed and if enacted, will actually lead to fewer jobs! To increase the minimum wage by 40% now would be crippling to businesses already struggling to claw their way out of the Great Recession. Mark my words: If Obama’s minimum wage is enacted, it will undoubtedly increase unemployment!
Back when I was in College, I worked one summer at a local warehouse fulfilling orders for a large office supply company. It wasn’t my dream job (not by a long shot), but it was a way to make some decent money over the summer months.
The job paid me a flat $10/hour, which was well above the minimum wage in my state. But they didn’t just give everyone $10/hour… that only went to the workers who showed up on time and knew how to fulfill orders.
Anyway, to make a long story short, I finished the summer with a good amount of money in the bank, but I promised myself I wouldn’t go back to work at the warehouse the following year. Warehouse work just wasn’t for me…
I did, however, visit the following summer to see how some of my friends were doing and what I saw absolutely shocked me. About a quarter of all employees had been let-go and replaced by robots. For the jobs that remained, handheld technology allowed one person to do what a handful of workers would have done the year prior. This is what happens when worker productivity does not rise faster than the minimum wage.
I mean no disrespect, but there are many jobs that simply are not worth $10/hour. That is not meant as a personal insult, as I am sure that many who are working minimum wage jobs are perfectly good people. But we cannot mistake an individual’s moral and social value for their actual market value.
The market value of labor doesn’t necessarily scale with the productivity of the laborer, or even the profitability of the corporation, but rather with the cost of alternative means of production. Every single worker has value until a machine is invented to do his or her job for pennies on the dollar.
Since 2008, millions of jobs in developed countries around the world have been lost to technology and these jobs are never coming back. Just as the cotton gin eliminated the need to process raw-cotton by hand in the late-Eighteenth Century, so too have computers and robots eliminated jobs in many industries here in America.
Bill Gates, the founder of Microsoft, has come out and warned us of the consequences of significant minimum wage increases. “If you raise the minimum wage,” he explains, “you're encouraging labor substitution, and you're going to go buy machines and automate things -- or cause jobs to appear outside of that jurisdiction.”
Mr. Gates is absolutely correct: minimum wage increases destroy jobs! The most dangerous part of Obama’s proposal is that the minimum wage will increase yearly according to cost of living increases. That means that in order to stem the tide of technology replacing jobs, minimum wage employee productivity would have to outpace the rate of inflation, which isn’t happening! Once again, we need to save this President from himself and STOP Congress from enacting this dangerous legislation! We need to make sure that this horrible legislation never even sees the light of day!
I want every American to be able to work to support his or her family, however there are other more sustainable ways to accomplish this. Decreasing the tax burden on individuals and businesses would be a great way to increase take-home pay. Unfortunately, the Democrats ignore the tax-cutting policies that have worked so well in the past. Instead, they choose time after time to redistribute the country’s wealth from the makers to the takers.
This wealth is not infinite. As you know, there is only so much wealth to redistribute. Even if the government took 100% of everyone’s income, that still wouldn’t even pay off Obama’s $17+ Trillion debt!
Now the Obama Democrats want to perform a social experiment and milk small business owners for all they’re worth, all in the attempt to increase entitlements and create more Democratic voters. But their attempts will backfire… Any attempt to increase the minimum wage will only encourage business owners to replace laborers with more productive computers or robots.
Once again, it is our responsibility to save the country from the Democrats it elected. Join me in telling Congress to STOP the President’s plan to raise the minimum wage and put more people out of a job!
Conservative Daily Staff