Letters and Topics

This will typically be about letters to the editor in the NWA Times that are written by me and or commented on by me and others.

Sunday, February 26, 2006

Minimum Wage NWA Times

It might just be my suspicious nature, but I see that raising the minimum wage will do more harm than good. It sounds politically correct to advocate raising the minimum wage so that it will help workers in the lowest wage positions. We all claim we feel sorry for them and how they need more money to live. That of course is true, they need more money in order to live. Its almost impossible to support yourself, let alone a family, on $5.15 an hour, especially when so many companies won’t keep you on full time either. The lowest wage people have to have at least two or more incomes coming in to a household just to get by, unless they live with their parents, or in a cardboard box.
The place where my suspicious nature comes in is that if we pay these workers this higher minimum wage, it will just give employers the incentive to restructure their pay scale so they can absorb the higher costs with no increase, and then pass those new “fake” higher costs on to the consumer. Everyone up the ladder, with the exception of the CEO, will have to take a hidden pay cut where raises will be slower, or won’t be as much, or other benefit cuts will take place to keep labor costs relatively stable.
Most people in this country won’t make the connection of higher corporate profits as a result of having to raise prices in order to cover the fake higher costs. Like with the oil and pharmaceutical companies, we Americans seem to buy their excuse that while they are making record profits they claim its their higher costs that are the reason. They think we are too stupid to see that higher costs are deductible and profits come after all those deductions, including R&D and exploration costs. Corporations will just be able to raise prices claiming that they have to do it so they can cover these higher costs, which they have successfully absorbed, and new record profits will then ensue, need I mention outsourcing?
The higher costs of course will hurt the small business the most which can’t absorb labor costs as easily. It will hurt the minimum wage people if the higher costs eat up their higher wage, or more. And it will hurt all other consumers with higher costs of everything they buy, especially for example, everyone living on social security. In the end it just creates a new, higher level of wages and prices in which no one wins. It simply reduces the value of the dollar which is code for inflation. The minimum wage workers, who are almost always the newest workers at any company and are on probation anyway, will enjoy their new found money only briefly until prices catch up and we are right back where we are now. Higher minimum wages sound good for politicians to say but as usual it doesn’t work in the real world.

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