Raise The Minimum Wage?

How many jurisdictions are proposing, or have already implemented an increase of the minimum wage to $15.00?  More than a few.

I cannot see the advantage, so I must be missing some information.  I have some questions.

  1. Are minimum wage jobs the first step to a career and so are an apprenticeship of sorts?  Do many people stay at that level?  Are those the ones who added no additional marketable skills to their resume?
  2. Do minimum wages help or hurt the workers?  Are there any studies with meaningful data?  If prices go up because of the initiative are the workers better off.
  3. Do minimum wages affect all businesses the same way?  Not likely.  Ones that have a significant labour component are affected most.
  4. Do the lawmakers notice that the law will really say, “Pay them more or don’t have them at all?”
  5. Is it possible to raise the price of some service without increasing its value and still survive?  If yes, then why stop at $15.00 per hour.  If no, then the initiative is without merit.

Businesses generally do not care how much they pay per hour.  They care about how much they get per dollar invested.  It is like someone who owns a vineyard.  Do they care how much they pay per hour or do they care how much per bushel of grapes picked?

For the unfortunate people who need the work and are trapped at minimum wage, programs that add to their marketability make sense.  These people must also contribute.  They must devote the time needed to upgrade their skills and develop better goals and attitudes.

It is a basic financial literacy thing.  You cannot have something for nothing forever, because the other side of that is someone must get nothing for something to make it possible.  They will not play that game indefinitely.

The government cannot provide the answer with a higher minimum wage.  Trying to make all low earners better off by raising their hourly rate is attractive theoretically, but it is not logically possible.

Don Shaughnessy is a retired partner in an international public accounting firm and is now with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.

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