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17 comments | August 01, 2007 | 11:55 AM | posted by Ryan

Some comments from Derek Archer on the federal minimum wage increase...


On Tuesday, July 24th, the first installment of the Fair Minimum Wage Act of 2007 went into effect. This law increased the federal minimum wage from $5.15 to $5.85 an hour and will continue to increase it over the next two years. This may look good at the first glance, but there are many hidden costs found in the minimum wage. Please allow me to explain myself.


A minimum wage law creates an artificial floor for businesses by limiting their resources. When faced with a raised minimum wage, businesses must make a hard choice. They must either raise the prices of their products and services or they must fire some of their employees in order to pay the wages of the rest of their employees.


If businesses, on the one hand, raise prices, people living on fixed incomes will be hurt. These people often depend on a Social Security or disability check every month. If businesses, on the other hand, choose to fire some of their employees instead, inexperienced and handicapped people will suffer most. Many jobs will be lost and some may even be outsourced to cheaper foreign labor.


An estimate made by the National Federation of Independent Businesses argues that 217,000 jobs will be destroyed if the federal minimum wage is increased to $6.65 per hour. The federal minimum wage is scheduled to reach $6.55 per hour next summer and $7.25 per hour the summer after that.


Some of the primary forces behind minimum wage laws are the unions. Unions stand to gain higher wages for their own workers when minimum-wage workers are making more money. In essence, minimum wage laws take economic opportunities away from the poor and needy to subsidize the greedy.

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17 Comments:

Anonymous kim sallar said...

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Anonymous Anonymous said...

As a veteran teacher of 37 years, I certainly feel that the salaries of experienced, certified teachers should be comparible to those professionals have certifications and credits toward a Master's degree and/or the education with in house trainings provided by the local department of education to any other career demanding the respect needed to perform. I feel this is exactly why schools have problems...the respect for teachers is not there. It has nothing to do with taking from the poor and giving to the greedy. That argument wouldn't hold with any other professional service. How can this logic require respect or understanding from professionals. Teachers are professionals, by the way. They have just as much or more as any other professional acquiring a logical salary of a professional.
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