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Paying Paul to Fire Peter
By Andrew Parker, Kansas
Ask any cashier at Dillon's Pharmacy in Wichita, Kansas, and they're all for raising the minimum wage. Why? "It's a good thing that they're raising it, the cost of living is too high," said David, a 20 year old Dillon's employee. "I don't know where they plan on coming up with the money though," he added.
"Proponents of the minimum wage hike have remarkably and consistently overlooked the fact that a majority of minimum wage earners are part-time and nowhere near the poverty line." -Andrew Parker
Andrea, a freshman at Wichita State echoed the idea, "You can't live anywhere on minimum wage." Evidently Congress agrees, too, and a bill proposing to raise the minimum wage is sitting on the President's desk.
A raise in the minimum wage has been touted as a boon to the poor by proponents. This is misleading. Money in any economy does not magically originate from some mysterious vault deep beneath the surface of the Earth. If we could simply raise the minimum wage and create affluence by fiat, then why not raise the minimum wage to $100 an hour?
So where is the money going to come from? Apparently, the burden will fall on the people who employ those workers, and indirectly on their customers. Quite frankly, it is a hidden welfare tax on a small portion of the population.
Proponents of the minimum wage hike have remarkably and consistently overlooked the fact that a majority of minimum wage earners are part-time and nowhere near the poverty line. True, there are some people trying to raise children and even support a family on minimum wage. However, having a family brings with it a certain amount of responsibility, which should not fall on business owners and customers via a federal mandate.
It is a very plausible argument that raising the minimum wage will be self-defeating, as business owners respond by raising prices, reducing the number of full-time workers, and hiring fewer new workers.
"If you want to transfer income to the working poor, there are fairer and more honest ways to do it,"said Steven E. Landsburg, an economist at the University of Rochester. "The Earned Income Tax Credit, for example, accomplishes pretty much the same goals as the minimum wage but without concentrating the burden on a tiny minority."
Judging from the facts at hand, the argument for raising the minimum wage is based on faulty reasoning and motivated by political maneuvering. This is certainly not the best way to insure a fair and competitive job market from top to bottom.
