The myth of raising the minimum wage to allow those at the lower end of the economic scale to make a livable wage “once again” is misguided at best.
We are hearing the familiar cry from those who believe they “CARE” about the poor regarding the need to raise the minimum wage to help these people have a livable wage and support their families, put food on the table, etc.
The problem is, however, the minimum wage philosophy does not and will never work to accomplish the objective. Why? Because whatever you set the minimum wage at becomes the new bottom and the consequences are felt throughout the whole economy.
“The do-gooders believe that by passing a law saying that nobody shall get less than $8 an hour or $8.50 an hour, or whatever the minimum wage is, you are helping poor people who need the money. You are doing nothing of the kind. What you are doing is to assure that people whose skills are not sufficient to justify that kind of a wage will be unemployed.” – Milton Friedman
What do you think the owner/employer of a business with minimum wage employees will do:
1. Reduce the number of minimum wage employees because those who were making the new minimum wage prior to the change now, because of their skill set or education level, must receive an increase in pay and it goes right on up the ladder.
2. This always has and always will result in increased costs for the products and services provided. The result is the employee who is now making a higher minimum wage is still poor and can only afford the exact same thing as they did before, thus resulting in the new cry for raising the minimum wage.
The only way to help people raise their economic position in life is to show them how to improve their skill set, learn a trade and/or get a better education. That being said, without the right attitude and habits it makes no difference. There truly lies the problem in the United States today. Too many people feel they are entitled to a “livable wage” no matter what they do or do not do. One must change their attitude and habits in order to change their life. No
one claims it is easy. Some people, because of the environment they were raised in will have a more difficult road to climb. The United States of America still offers everyone the opportunity to wake up each morning and begin to change how they think and how they act. We have to incentivize that and not incentivize the status quo or how can we get more from the government, which is in essence “robbing Peter to pay Paul”. People are in particular circumstances because of choices they have made and the person they will become is built on the choices they make today.
There will always be a foundational income and that sets the baseline. Those at the base will NEVER be able to have what others who have learned skills, trades or achieved an educational degree have that puts them in a position to do better than the baseline. Minimum wage will never be a livable wage. It was never intended to be a livable wage. It was meant to be a wage for a starter position or a part time position and was never meant to be a career, and never will be. Our country needs to start putting in place ways that incentivize people to improve their financial position in life. Continually pushing to raise the minimum wage or pushing increased entitlements, though with good intentions, has failed. Actually, over the past 60 years this mentality has created more poverty, not less. The definition of insanity is to continue to do the same thing and expecting different results. The expectation that increasing the minimum wage and will produce different results is insane.
In closing we are supposed to live in a country that offers us the right to life, liberty and the pursuit of happiness and never the entitlement to these. I recently heard something that says it all about what each of us can do to make their lives better. “The only two things that I can control in my life are attitude and effort”. Think about that for just a second. No matter what else you do or the government does if you don’t have a positive attitude and put forth 100%
effort nothing else matters. One cannot spend our way out of poverty.