The current administration has many economy killing policies, but none is more misunderstood than the minimum wage.
This vote buying/economy slowing gimmick is being brought out again, just coincidentally going into an election year.
Those who have a poor understanding of economics and those hoping to play on that ignorance love this issue, but it is a job and economy killer.
It is very shallow thinking to believe that raising the minimum wage helps anyone. It plays to the common misconception that money and the economy are the same thing, but they are not. The economy is not based on money, but on the production of goods and services. Raising pay without increasing productivity only reduces the value of money.
What good does it do to have more money if that money is worth less? Unfortunately this is not the only result of an increased minimum wage.
In a free market, wages are dictated by value. If your work is worth more, you will be paid more. If you are not paid what you are worth, you are free to move to a job in which you are paid what you are worth.
When government steps in and sets a minimum wage, then those not worth that rate, will not get jobs. The people who lose out are the ones with no experience or diminished capacity. Without the chance to work, these people will never get work experience which would make them more valuable, allowing them to move up the pay scale.
It is self evident that a person cannot climb the ladder of success if the bottom rung of the ladder is out of their reach.
The minimum wage prices some people out of the job market and increasing it will price more of them out, increasing unemployment and harming the economy.
Submitted by Virtual Newsroom