Raising the minimum wage - what is it they just don't get????

Once again liberals are harping to raise the minimum wage. They think it is fair, and they believe it will help the economy. Wrong on both counts.

First, the myth that it is "fair". The only thing that is fair is to allow free market to do its job.It is fair to pay more only when someone earns more. It is never, ever fair to manipulate the economy for all, simply to benefit the few. A manipulated economy always - ALWAYS - fails.

But the more important point is that it would actually harm, not help the economy.Why is it that liberals cannot grasp the simple fact that every increase in cost to business, whether higher taxes, more regulation or forced increases in wages, must be passed on to consumers. No business has a money tree, nor can they print their own money. In order to pay employees more, the business must add those costs into the price of their products and services.

And when costs of goods rise, the economy suffers. So, if the minimum wage is raised by 10%, for example, most of the products they use will also rise, and collectively those cost increases not only wipe out their increase, but often reduces the value of the rest of their income.

Don't believe it? Consider...

Let us say you own a widget company. You sell 1000 widgets a month for $10 each. You gross is $10,000 per month. After costs, your net (about the national average) is 20%, or $2,000. It takes 3 employees to make those, and you pay each employee $1000/month.

Now you are forced to pay those employees $1100 per month. This reduces your net to only $1700. You cannot afford to take a pay cut just to increase the wages for your employees - you, too, have bills to pay. So, to continue getting your $2000 per month, the cost of each widget must be increased to $10.30.

But no - it must go up more, because the vendors who supply you the materials, and your advertising, and everything else has also gone up because they, too, had to increase wages and pass on costs. So, your $10 widget now costs $11.00.

You employees, who think they got a raise, are now paying more for their widgets, their Ramen, their clothes, their food and everything else. And so do the rest of us, who already earn more than minimum. This reduces the availability of cash to invest, save or otherwise boost the economy.

So much for the raise. The only thing that was raised was inflation and false hopes.

Let free market work. Assume there is only one dishwasher. If Joe's restaurant pays his dishwashers $8/hour, then Mike's restaurant must pay more in order to get the dishwasher to work for him. Then Joe must offer more, to keep his diswasher. And this competition in a free market will raise wages to where they are most efficient. As pay increases because of competition for dishwashers, more and more people will be willing to wash dishes. Eventually there will be enough dishwashers for both restaurants, paying a wage that is fair.

Capitalism works - but only if the governments stays out of it and stops trying to manipulate it.

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