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Raising the minimum wage to $10.10 is a bad idea

Over the past year or two, you’ve probably heard liberal politicians discuss raising the Minimum Wage to $10.10 per hour. The argument usually involves some of the following points: No one who works 40 hours per week should live in poverty, and you can’t raise a family on minimum wage (which is currently $9 per hour). I would agree with those assertions, but still disagree on the wisdom of raising the minimum wage.

Liberals tend to see the minimum wage as an economic death sentence. I tend to see it as a starting point for people who need to prove themselves. My first job after high school paid just $4.45, which at the time, was minimum wage. I had a diploma and a good work ethic, but not many skills and no track record. Now, after two degrees, gaining many skills, and building a work history, I can command a wage higher than $9. Let’s face it, some people just don’t deserve a raise. To ignore this fact is to reward mediocrity and incompetence.

The argument about not being able to support a family on minimum wage is the one I find most laughable. I’m one of those weirdos who believe children should come after marriage and a certain level of financial stability. If one is making minimum wage, maybe having a child…or two…or three, isn’t the best idea. Should employers be punished for their employee’s poor planning and lack of common sense? To liberals, the answer is yes.

This brings me to the part that is most challenging for liberals: The use of common sense applied to a real-world example. Let’s say you have a small business which employs 10 people at minimum wage. If each employee works 40 hours per week, they would earn $18,720 each, for a total annual payroll of $187,200. Now, if the minimum wage goes up to $10.10, each employee’s annual salary would rise to $21,008. That’s a difference of $2,288 per employee. The annual payroll would increase to $210,080, and increase of $22,880.

An astute reader may notice that the annual increase is a bit higher than an employee’s annual salary. For many businesses, the increased labor costs would be managed by getting rid of an employee, and putting more responsibilities on those who remain. Of course, the increase isn’t actually $22,880. It’s actually a bit more.

The $1.10 per hour isn’t the only increase to factor into the equation. Since an increase in wages also leads to a increase in payroll taxes and TDI, the business owners sees even more expenses. I know many progressives don’t have much use for business owners or capitalism, but at some point, the numbers just aren’t going to work.

If the minimum wage does increase to $10.10 per hour, and increases annually according to the rate of inflation, as some want, what will happen to the economy? Jobs will be lost, many small businesses will be pushed to the brink, and many will close. What will happen then? I don’t know, but I’m sure the liberals will be able to come up with an expensive social program to pay for their mistakes.



This post first appeared on RI Republican | Limited Government, Individual Lib, please read the originial post: here

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Raising the minimum wage to $10.10 is a bad idea

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