Tuesday, June 27, 2006

Democrats Playing Games on Minimum Wage

As it seems to happen every year, the Democrats are pushing for an increase in the minimum wage. As anyone who has ever taken a course in economics knows, increasing wages for existing workers will lead to higher unemployment because businesses will no longer be able to afford the same number of workers on the same amount of profits. Of course the other possibility is raising prices, but that's hurts poor people too.

So let's say Congress raised the minimum wage. Take a business like Walmart (the evil empire). As it stands now, Walmart employs a certain number of workers. If they had to pay them more, they'd be faced with two choices: either fire some of the workers and make the rest work harder or (more likely) raise prices. And since the greatest percentage of Walmark's consumers are poor people, those people will have to pay more, thereby giving away any added income the minimum wage increase might have given them. So some workers will lose their jobs and the ones who won't will end up paying back their salary increases anyway.


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