Tuesday, February 4, 2014
Economics 101: Increasing minimum wage hurts economy
Obama said raising the minimum raise would improve the economy, but he failed to tell people that only 1% of the workforce receives the minimum wage. That would hardly have a positive effect on the economy. Add into that that for every dollar the minimum wage goes up, the value of the dollar goes down the same. For instance, while $1 might buy a loaf of bread today, once companies raise prices so they can afford the new minimum wage, and give everyone else raises in order to be fair to them, the price of a loaf of bread will be $2. So even while people will make more money, they will gain zero ground. Add into that that companies only have so much money for new hires, and once they pay for the new minimum wage, there goes any new jobs. So, if Obama considered this economics 101 lesson, the last thing he'd want to do right now is raise the minimum wages. This is a perfect example of "it sounds like a good idea" trumps "facts show it is not a good idea." Seattle wanted to raise the minimum wage to $18 an hour. Throw in there free healthcare, and why would anyone go to college and work.