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The numerous problems with increasing the minimum wage

By Donna Westfall – December 19, 2016 – Have you ever put up a ladder to someplace that doesn’t stay in place and you fall on your keister?

That’s what increasing the minimum wage is all about.

Our legislators fell short of solving a huge problem by ONLY increasing the minimum wage without taking into account all the associated problems.

A LIVING WAGE DIFFERS THROUGHOUT THE STATE

Why should the minimum wage apply equally all over the state when there are higher cost of living areas and lower cost of living areas throughout the state.  For example, Del Norte County housing is so much lower than San Francisco or Los Angeles.

MORE UNEMPLOYMENT

It will cause more unemployment because employers will be compelled to let people go or reduce their hours or turn to robots just to make a profit and stay in business. If our legislators had any brains they would tie minimum wages to mandatory unemployment rates.  Example:  If unemployment is over 4%  in the state of California, no wage increases go into effect.  Period.

NO INCENTIVES FOR ENTREPRENEURS

What incentives are there for creative business people to start up new businesses in our State?

GOVERNMENT INDUCED INFLATION

Many employers will have no choice but to increase prices on their products.  This, in turn, increases inflation.

NO INCENTIVE FOR HIGHER OR BETTER EDUCATION

With the promise of up to $15 an hour by 2022, what incentive is there for a lot of people to better their education.

MORE BUSINESSES LEAVING OR CLOSING

If a company in California produces a product that competes with a company in Ohio, once the California company is stuck with mandatory minimum wages, they have lost their competitive edge.  They will either close down or turn to a cheaper labor market like south of the border or overseas.

HIGHER WAGES MEANS MORE TAXES FOR GOVERNMENT BUREAUCRACIES

As with everything else involved with a job, payroll includes deductions for taxes.  More income, means more taxes in the coffers of government; which in turn means more regulations and government spending.  What a revolting thought.

Overall, the reasons for increasing the minimum wage will most likely harm those already poor, unemployed and under trained by reducing or continue to eliminate them from the workplace.

 

 

 

 

 

 

 

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