If you’re looking for a job, one phrase you’re likely to hear is “minimum wage”, referring to the lowest amount that employers are required to pay. As such, you’re likely to get it in the low-level jobs that almost everybody hates, like cleaning personnel or fast food workers. These kind of jobs are supposed to introduce an employee to his or her first job, or start off a worker with lower skills until they develop new skills, some of which may be necessary to get into better, higher-paying jobs. Of course, in recent years you have leftists screeching on about why we should raise the minimum wage (this was part of Bernie Sanders’ platform), claiming that it would be good for the economy. My question is this: why?
First of all, this seems to be a chiefly American issue, but let’s try and talk about Britain. In my country, the minimum wage was introduced under Tony Blair’s government via the Minimum Wage Act of 1998, and enforced in 1999 when the hourly rate was at £3.60, or £3 if you’re under 22. Today, the hourly rate is £7.20 for over 25’s, £6.70 for people aged 21-24, £5.30 for 18-20-year-olds, and £3.30 if you’re under 18. As it stands, I don’t think the rate is too high, though it is predicted that the minimum wage will increase to £9 by 2020. You rarely find critics of the minimum wage in Britain, but the main consensus of the critics is that raising the minimum wage would risk causing higher unemployment, which brings us to the debate in America, where the current minimum wage is $7.25 an hour, and leftists are pushing for it to be increased to $15/hr.
Left-wing news outlets will tell you a lot of nonsense about how the minimum wage is good for families, good for economic recovery, good for young people, and all that sort of nonsense, but chief among their “concerns” is the working class. For them, raising the minimum wage is round about the equivalent of reparations for class warfare. That’s certainly how the progressive Alternet sees things.
“Most of all, a big jump in the minimum wage would be a reparation. Because let’s be clear: class warfare has already been undertaken on behalf of the 1 percent……To raise the minimum wage would be literally the minimum we could do for those who have suffered from the economic crisis: the working population. It would be an act of justice.”
So the idea behind raising the minimum wage is essentially being fuelled by vaguely Marxist ideas of class conflict, and we all know what Marxism does to people who adopt it. It turns people into deranged ideologues who are obsessed with “social justice”, to the point that everything is political. Of course, Marxism aside, there are a number of reasons why I oppose the idea of raising the minimum wage.
The very idea raises the question of why you want the minimum wage increased. As I pointed out in the first paragraph, the minimum wage is what you’re paid for low-level jobs. Do the people who want a $15/hr minimum wage want to stay on minimum wage? Call me old-fashioned, but I believe that the goal in life is to work hard and earn your way out of poverty, not to stay working in a fast food restaurant until the day you die. If you want a $15/hr salary or higher, why not get job training or a degree? Surely that would be more satisfying and rewarding in the long run than begging the government to make working at McDonalds more luxurious.
Of course, raising the minimum wage comes across as another idealistic proposition that doesn’t work out well in reality, and thankfully, there is a real-life demonstration of what happens when you raise the minimum wage too high. Earlier this year, the city of Seattle, Washington has its minimum wage raised to the desired $15/hr, well above the statewide rate of $9.47/hr. The result was increased unemployment and fewer jobs. The problem is that increasing the minimum wage made it more expensive for companies to hire labour, and so the natural result is that businesses would have to lay people off in order to save money. Of course, this has only happened in Seattle so far, and given the consequences of that, to apply the $15/hr minimum wage on a national level would be detrimental to the US economy.
Proponents of an increased minimum wage often point to Australia as a country with higher minimum wage and low unemployment rate, except they’re lying about the last part. Australia’s minimum wage is an obscene 17.70 AUD per hour, and the country’s unemployment rate is just shy of 6%, which is higher than it is in Britain and America (both of which as of now have an unemployment rate of 4.9%). To be fair, we could do worse. Spain’s unemployment rate has been colossal for a while now, and is now at 20%, but then again, Spain’s economic performance is due to a number of other factors. Meanwhile, Britain and America could do just fine without raising the minimum wage any higher.
If the point of raising the minimum wage is to eliminate poverty, then it is a very ineffective solution. All it will do is create an incentive for younger workers to stay in a low-paying job. After all, in a country where the entry-level jobs pay more, what’s the point in moving on to a more rewarding job in the future? What would even be the point in going to a community college? If the minimum wage in Britain were £15/hr, most young people would stay working at McDonalds, which isn’t what should be happening in a healthy economy.
Of course, leftists and Democrats who advocate increasing the minimum wage don’t care about any of that. They don’t care about the facts, and they only care about controlling the economy and creating their utopian society. The problem is that leftist economic policies have consistently proven to be destructive. America generously gives a number of benefits as part of an ongoing “War on Poverty”, and the result is that there is less of an incentive to work. The Democrats’ propensity for big spending has done nothing other than damage local communities, as could be seen in cities that have consistently voted Democrat for upwards of five decades. I don’t totally understand economics, but it seems to me that leftists don’t give a damn about how the economy actually works. Anyone with decent economic knowledge and isn’t marinating in left-wing nonsense would know that raises the minimum wage as high as $15/hr is an insane, irrational, and impractical idea.