Tag Archives: minimum wage

Donald Trump Switches Position on Minimum Wage Stance

Donald Trump, the Republican party’s current front-runner, has apparently changed his position on increasing the minimum wage in the United States.

“Wages in are country are too low, good jobs are too few, and people have lost faith in our leaders. We need smart and strong leadership now!” said Trump in a tweet early Monday.

Trump’s tweet follows a Sunday interview on CBS’ “Face the Nation” in which Democratic hopeful Bernie Sanders (I-Vermont) stated “Look, many of Trump’s supporters are a working-class people, and they’re angry,” and added, “And they’re angry because they’re working longer hours for lower wages. They’re angry because their jobs have left this country and gone to China or other low-wage countries.”

Sanders went on to say “In fact, he has said that he thinks wages in America are too high.”

Trump issued a flurry of tweets between Sunday night and Monday morning in which he denied a previously held position, stated in his opening remarks at a Fox Business Network debate on November 10, that “Taxes too high, wages too high, we’re not going to be able to compete against the world… People have to go out, they have to work really hard, and they have to get into that upper stratum.”




Trump reiterated in an interview on NBC’s “Morning Joe” the day after the November 10 debate that “It’s a tough position politically… We have to become competitive with the world. Our taxes are too high — our wages are too high. Everything is too high. We have to compete with other countries.”

Trump later claimed in an interview with Politico that his statements were specifically in regard to raising the U.S. minimum wage, not wages in general.

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Berkeley, Calif. City Council to Consider Raising Minimum Wage to $19 Per Hour

The Berkeley City Council is set to vote on a proposal that would raise the city’s minimum wage for workers to $19 per hour by 2020.

According to KQED News, the proposed change to the city’s minimum wage schedule, which was recommended by Berkeley’s Labor Commission, will face consideration at a special council session on November 10.

Polly Armstrong, chief executive of the Berkeley Chamber of Commerce, told CBS MoneyWatch that despite the fact that the businesses she represents are largely run by political progressives in one of the most liberal corners of California, a blue state, “What I hear is business owners who say, ‘This may put me out of business, but I don’t want to say publicly that I don’t want to pay my workers everything they deserve.’

[RELATED: Pizza Shop Announces Impending Closure Due to Seattle’s $15 Minimum Wage Hike]

Because we care about our workers, it feels good to say everyone should get a living wage,” said Armstrong. However, she noted that many small business owners do not earn as much as $19 per hour themselves. “It’s just that bottom line,” she said.

CBS Moneywatch’s Aimee Picchi wrote that some business owners who “said boosting wages to $19 an hour would threaten the viability of their stores… spoke on condition of anonymity for fear of appearing to place business interests ahead of workers.

Berkeley’s current minimum wage is $10 per hour and is set to rise to $11 per hour on October 1 under a recently-passed minimum wage hike that will see it rise to $12.53 per hour by October of 2016. The Labor Commission’s new proposal would hike the wage even further to $13 per hour by October 2016 on a schedule that would end in a $19-per-hour minimum wage by 2020. The Labor Commission’s panel that recommended the proposal did not include any area business owners.

Supporters of the measure claim that workers need the sharp increase to keep up with rising Berkeley rent prices, which have reportedly spiked 75 percent in 6 years to an average of over $2,800 per month for a one-bedroom apartment.

Armstrong said that such a sharp minimum wage hike could drive small businesses out of the city in favor of corporate chain stores. “It’s one thing if you want a town full of Applebee’s and P.F. Changs, but that’s not what Berkeley wants,” she said.

Berkeley’s city manager pointed out the fact that 60% of companies in the city are small businesses.

Business owner Dorothée Mitrani told the Berkeley City Council at a hearing last week that she is already being forced to close one of her existing business due to increasing labor costs. “I can’t survive. It’s not about not paying people. It’s about allowing us to run our small businesses so we can pay these people,” she said.

Labor Commission Chairperson Wendy Bloom told ABC 7 News, “We’re looking at trying to raise people out of poverty. You know, as a registered nurse, I know that you can’t have a healthy community unless you have a living wage, you can pay the bills, you can pay your rent, and we know housing isn’t affordable in the Bay Area.

FEE: Why the $70k Minimum Salary Failed (And Why That’s a Good Thing)

By Max Borders

Experiments in social engineering don’t usually go well. And a lot of people gave Gravity CEO Dan Price a hard time for trying to change the normal salary structure inside his firm so that everyone would have the “happiness salary,” which researchers told us is around $70,000 a year.

The law of unintended consequences kicked in, as it will, and three months on, things aren’t going so well.




As Mark J. Perry and Michael Salzman report,

[quote_box_center]The salary divide between less-experienced employees and more-veteran staff is where the story gets interesting. The Times reported that two of the company’s best employees quit after Price’s raise heard round the world, chafed by a policy that would “double the pay of some new hires” while leaving the paychecks of more-senior employees mostly untouched.

The company’s former financial manager explained it this way: “(Price) gave raises to the people who have the least skills and are the least equipped to do the job, and the ones who were taking on the most didn’t get much of a bump.”[/quote_box_center]

Critics were right to point out that this is, more or less, corporate socialism.

[quote_box_center]Similarly, a former Web developer for Gravity Payments was upset at a pay policy that “shackles high performers to less-motivated team members.”

This negative response from more experienced employees to a dramatic pay hike isn’t limited to Gravity Payments and the tech sector. In the same city that Price’s company calls home, a recently enacted minimum wage increase to $15 an hour has some veteran restaurant employees seeing red.[/quote_box_center]

A number of commenters saw this coming, even as Utopians on the progressive left hailed it as the future of American corporate remuneration.

But there was something important about human nature that Price’s cheerleaders were forgetting. Not only would it be hard for the company to afford to pay everyone that much (turns out it was), top performers would feel undervalued due to what moral psychologist Jonathan Haidt calls “fairness as proportionality.”

As Haidt explains,

[quote_box_center]Distributive fairness … refers to how we distribute stuff — benefits as well as burdens. Is everyone getting his fair share and doing her fair share?

But there are two subtypes of distributive fairness — equality (everyone gets the same) and proportionality (all receive rewards in proportion to their inputs; this is sometimes called equity). This simple distinction can help us understand many of today’s most vexing controversies.

Everyone endorses proportionality, but the left simultaneously endorses equality, even when it is in tension with proportionality. The right has no interest in equality for its own sake. Conservatives prefer proportionality, even when it leads to massive inequalities of outcome.[/quote_box_center]

Inside a firm, fairness as proportionality is vital to the corporate order. High performers not only should feel rewarded for their contribution relative to lower performers, such an ethos aligns incentives for upward mobility and higher performance by everyone over time.

Equalizing salaries not only suggests that people’s skills and labor don’t have a labor market value outside the firm, but that everyone’s contribution is essentially the same. The reality is very different of course.

CEO Price’s theory (no pun) had been taken from social scientists with bubble sheets. They had determined the happiest people make around $70,000 per year. Price thought he’d have happy workers if he paid them all the same salary. Happy workers are normally good workers. So it was an experiment worth trying.

But this is so often the problem with social scientists with bubble sheets: their research both lobotomizes and strips away context — or what F. A. Hayek called the circumstances of time and place (and also, in this case, evolutionary wiring).

The $70,000 meme was derived by asking a whole bunch of people if they’re happy. The ones that were making around $70,000 were pretty happy, but each additional dollar in pay didn’t help them become that much happier. So as social scientists will, they lobotomized each person by turning him or her into a plot point which could be aggregated.

Such could then be picked up by every journalist in the world looking to advocate for the social engineering of salaries and wages. But in the process of aggregating people’s opinions, you remove all of the contexts in which they live, work and regard themselves as part of a real and functioning social order that has real, functioning market prices — even for labor.

So people familiar with evolutionary psychology or the work of Hayek would have found Price’s warmed over theory of maximizing “gross domestic happiness” (GDH) silly from the start. But Price formed his idea based on the work of some highly respected academics.

And like many successful people, Price probably felt it was time to signal to the world that he’s not an evil capitalist, but rather a good person. He probably also thought it would work, and that he’d be a trailblazer.

But this leads us to the second vital lesson about free people operating in relatively free markets: It was his experiment to make. The failure, thank goodness, was localized.

As Cord Blomquist is quoted as writing on social media:

[quote_box_center]This is exactly the kind of experimentation that we should praise, not belittle and label as “socialist.” Dan Price did what he thought was right with his own business. He turned out to be wrong, it seems, but that’s how most experiments in the market work. The majority of businesses fail and the majority of business decisions are flawed.

And to be fair to Mr. Price, we live in an era of flat org charts, 20% time, remote work, Zappos-style customer service, and all sorts of other novel schemes. He was emboldened by these things and thought his radically high pay hikes would result in a company with happier and more productive employees.

Are there flaws with that thinking? For sure, but you can see how he might have thought he was on to something revolutionary.

Regardless, Price did this privately, forcing it on no one.

So here’s to capitalism, a system that allows us to learn from the failure of others without having to pay for it.[/quote_box_center]

It’s not just capitalism that can work this way, but politics.

Just think of the many wonderful-sounding ideas politicians and social planners cook up for us all the time. Thank goodness most of them aren’t implemented.

The difference between them and CEO Price is that failure is system wide. That’s why it’s more important than ever, at the very least, to keep a system of decentralized federalism in place. Big ideas can make for big failures. Think Obamacare. Or imagine a $15 an hour (or a $70,000 a year) national minimum wage.

In Switzerland, for example, federal power is highly decentralized. Canton-level experiments in social planning can be avoided or adopted by the other cantons, but they can rarely if ever become national policy. And thanks in part to that tradition, Switzerland avoided joining the European Union superstate. And lucky for them — unlike Germany, they’re not currently on the hook for Greece’s experiments in credit card welfare statism.

The lessons? First, experimentation is good. The next great innovation will come out of experimenters like CEO Price. And he should be free to experiment with the rules of the firm he runs.

Second, experiments should start local. Great ideas often emerge from a lot of trial and error, and rules — especially new rules — should have to compete with other sets of ideas. Social and economic experiments are also best if they start locally.

Though it might be tempting to hurl I-told-you-sos at Dan Price, he is to be commended for his attempt to criticize by creating — using his own resources. That’s more than we can say for politicians who want to experiment with other people’s lives.





Reprinted from FEE with permission under Creative Commons Attribution License


Sanders Sponsors $15 Per Hour Minimum Wage Bill, Pays Interns $12 Per Hour

U.S. Senator and 2016 Democratic presidential candidate Bernie Sanders introduced the Pay Workers a Living Wage Act on Wednesday, a bill that would increase the federal minimum wage to $15 per hour. However, an ad seeking interns on his Senate office’s website offers to pay them only $12 per hour.

A screenshot, seen below, of Sanders’ ad offering to pay $12 per hour to Senate interns shows that it appears directly adjacent to a picture of Sanders speaking at a rally calling for a national $15 hourly minimum wage.


The federal minimum wage has not been raised since 2009. Increasing the minimum wage would directly benefit 62 million workers who currently make less than $15 an hour, including over half of African-American workers and close to 60 percent of Latino workers. If the minimum wage had kept up with productivity and inflation since 1968, it would be more than $26 an hour today,” claimed a press release on the bill by Sanders’ Senate office.

The press release continued, “State and cities are acting on their own. New York’s Wage Board today is expected to approve a new $15 minimum hourly pay for the state’s 200,000 fast food workers. Washington, D.C., and Kansas City, Missouri, are considering raising the wage. Los Angeles, Seattle, and San Francisco already passed ordinances raising their minimum wage to $15 an hour. Twenty-six states already enacted minimum wage increases.

However, Sanders has yet to act on his own by instructing his Senate office to offer a $15 hourly wage. The Atlantic notes that senators set their own policies on pay for interns.

Sanders said in a statement on the bill that “the largest low-wage employer in this country is the federal government” and added, “It is unconscionable that workers in the Senate cafeteria, workers like Charles Gladden who is with us today, make wages so low that they cannot afford to pay the rent.

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Jason Stapleton Live: Government Lies, Minimum Wage and Obamacare, PLUS: Guess who’s spending your money now!

Jason will be tackling a wide range of issues today, ranging from minimum wage to Obamacare.

The Jason Stapleton Program is live from 11:05 am to noon eastern. Enjoy replays from earlier episodes before and after the live show.

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Pizza Shop Announces Impending Closure Due to Seattle’s $15 Minimum Wage Hike

Seattle, WA- “People like me are finding themselves in a tougher situation than ever,” said Seattle pizza shop employee Devin Jeran in comments to Q13 FOX News. Earlier this month, Jeran was the recipient of a raise, as Seattle’s mandated minimum wage hike began to kick in, forcing large businesses with more than 500 employees and small business franchises to first begin paying employees $11 per hour starting this month before being required to raise wages to $15 per hour by 2017. Small businesses without franchise relationships are allowed to wait until 2021 to raise their wages to $15 per hour.

Though Jeran will receive a bigger paycheck until August, his paychecks will stop for good after that, as the small business Z Pizza franchise at which he works is set to close under pressure from the new minimum wage law. The franchise’s owner, Ritu Shah Burnham, described the efforts she’s already taken to adapt to the phased increase to the new $11 minimum hourly wage, “I’ve let one person go since April 1, I’ve cut hours since April 1, I’ve taken them myself because I don’t pay myself.” However, the fact that her 12-employee business has a franchise relationship with Z Pizza means that, under the new minimum wage law, she is required to retool her business such that it can stay open while paying employees $15 per hour within just 2 years, rather than being able to wait until 2021 like other small businesses, a feat Burnham says she can not manage. “I know that I would have stayed here if I had 7 years, just like everyone else, if I had an even playing field. The discrimination I’m feeling right now against my small business makes me not want to stay and do anything in Seattle,” she said.

Earlier this year, International Franchise Association representative Matthew Haller spoke out against the discriminatory nature of Seattle’s new minimum wage law in terms of how it affects small business franchises and said in comments to CNBC, “Franchisees are often small and local, and face the same challenges that other small businesses face. The franchise system is still a network of small businesses that will face irreparable harm due to these extra costs.”

Burnham told Q13 FOX News that she worries about what her employees will do after her business closes, “I absolutely am terrified for them. I have no idea where they’re going to find jobs, because if I’m cutting hours, I imagine everyone is across the board.”

Chicago City Council approves minimum wage hike

An ordinance brought before the Chicago City Council to raise the minimum wage to $13 an hour was overwhelmingly approved Tuesday by a vote of 44-5.

Currently, the minimum wage in Chicago is $8.25, and under the new ordinance this will rise to $10 an hour by next July and continue to rise by fifty cents every year until 2019.

The ordinance cites the rising levels of inflation for the need to raise the minimum wage.  Specifically, the ordinance says, “rising inflation has outpaced the growth in the minimum wage, leaving the true value of lllinois’ current minimum wage of $8.25 per hour 32 percent below the 1968 level of $10.71 per hour (in 2013 dollars).”

Chicago Mayor Rahm Emanuel said, according to the Chicago Tribune, the minimum wage increase is “part of an economic strategy to make sure that work pays … and not only that work pays — simple — but no parent that works should raise a child in poverty.”

While some groups such as the Raise Chicago Coalition applauded the raising of the wage, others said the approval of the ordinance is a mistake.

Tom Tunney, a restaurant owner in Chicago, said, according to the Huffington Post, “How do you go from $8.25 [an hour] to $13 overnight?  You know what you do? You raise the prices and you’ve also got to find ways to do it with less help. That’s what’s going to happen.”

Alderman Bob Fioretti, however, said the ordinance does not go far enough and the minimum wage could be raised to $15 an hour.  “While I’m proud to support today’s increase in the minimum wage, we can’t stop fighting now,” said Fioretti.  “The chant in the streets here and nationwide has been ‘show me $15,’ not ‘show me $13 by 2019.'”

$20 Minimum Wage Endorsing Socialist Group Posts $13-Per-Hour Job Listing

The website of Seattle’s Freedom Socialist Party lists its most recent presidential candidate Stephen Durham’s political positions, which include the party’s effort to “raise the minimum wage to $20 an hour.” The group also avidly supported a successful push for a $15-per-hour minimum wage in Seattle, which passed this year. However, as Zenon Evans at Reason pointed out, that same political party just got caught posting a $13-per-hour job listing seeking a web content manager with web development skills.

Opponents of increases to the minimum wage often cite unintended consequences like price inflation, the elimination of jobs for unskilled workers, and small businesses‘ inability to pay higher wages as reasons for opposing such measures. As a small non-profit, the Freedom Socialist Party would certainly be wise to limit its labor expenses to the extent possible considering the fact that it is competing with organizations like the Republican and Democratic parties that have exponentially bigger budgets.

However, the Freedom Socialist Party promised that its push for a $15-per-hour Seattle minimum wage would “leave no one behind.” The party’s article promoting Seattle’s minimum wage hike includes this choice quote, “The Seattle fight has moved from the streets to City Hall. In May, new Mayor Ed Murray, Democrat, announced his proposal for $15/hour — for some workers, after several years. Healthcare, tips, and other ‘compensation’ would be calculated into their ‘income.’ In short, Mayor Murray’s plan caters to big business… Concretely, Murray’s proposition affects 102,000 working people in Seattle.” In that quote, party activist Linda Averill effectively criticizes loopholes in Seattle’s minimum wage that allow some employers to get around it.

One such loophole allows small employers like the Freedom Socialist Party to wait seven years before fully implementing the $15 minimum wage. The City of Seattle’s posting on the new minimum wage law says, “Small employers (businesses with fewer than 500 employees) will reach a $15 an hour minimum wage in seven years. Also established is a temporary guaranteed minimum compensation responsibility of $15 an hour to be met within the first five years, which can be achived [sic] by combining employer-paid health care contributions, consumer-paid tips, and employer-paid wages.” Consequently, the Freedom Socialist Party is not technically violating the minimum wage law that it promoted, but is merely using a loophole that it criticized to leave its own future web content manager behind with regards to the $15-per-hour pay rate.

Reason points out the fact that web development, one of the skills required of the Freedom Socialist Party’s future employee, typically brings in around $62,500 per year according to a Bureau of Labor Statistics citation by US News and World Report, meaning that the chosen applicant will have to work at wages far below industry norms. Given the reality that small organizations and businesses do not have unlimited money and sometimes can not afford to raise wages to an arbitrary level, the Freedom Socialist Party’s example proves that its rhetoric about small businesses’ struggles with conforming to a minimum wage are not just a “phony concern,” an argument that party activist Linda Averill advanced in her article promoting Seattle’s $15 minimum wage hike. In fact, it is a very real concern for the Freedom Socialist Party itself.

The controversial job listings were posted on Craigslist and Indeed, and a screenshot of the Indeed posting can be seen below. One wonders how this future employee will feel when being asked to design graphics promoting a $20-per-hour minimum wage while working for $13 per hour.

Minimum Wage Survey Results

The results of the minimum wage survey are in and the results are overwhelming. The majority of BenSwann.com readers think there should be no minimum wage.  64.78% say the minimum wage should be set to $0/hr with ‘stay the same as it currently is’ coming in second with 13.94%. The majority of those who commented “other” on the question stated that they believe the government should not have a role in setting the minimum wage.


min wage survey


When survey takers were asked to comment on the minimum wage the same trend was found.

One survey taker said:

“I employ 73 people in an Assisted Living Community. I don’t pay anyone the minimum wage they all make more than that. If we by law had to pay $10.00 + an hour it would only hurt the concumers of our service because we would have to charge more each month from our residents. We would just raise the cost of our products and services. That is what all companies will do, as well as let go off employees. That is the only way! Minimum wage jobs are not supposed to be a living wage, they are stepping stone jobs while going to school or learning new skills to move up a career ladder. It is assinine to think that we would be providing for kids while working at McDonald’s or Walmart for minimum wage. What happened to the American dream? Go get an education and a skill set people. I am the Administrator but I got 3 degrees and worked plenty of low pay jobs to ultimately get here. That is what I look for in people to they have aspirations and a goal? The Federal Government and all its entitled hand-outs and programs are crippling people of this country. Increasing minimum wages will only hurt the poorest in this country period!”


Another commented:

“Minimum wage does nothing but remove the bottom rung of the ladder to make it more difficult for poor people to climb out of poverty. Prices will rise to compensate for w/e min wage is enacted and we will all pay more for everything. Thus the transfer of wealth from the middle class to the elite increases with it.”

One business owner said a raise in the minimum wage would force them to close their business.

“As a small business owner, and increase in minimum wage will force me to close my doors.”

Some pointed to the Federal Reserve as the reason the minimum wage is an issue.

“Minimum wage has only become an issue because of the devaluation of the dollar by the Federal Reserve.Minimum wage has only become an issue because of the devaluation of the dollar by the Federal Reserve.”

Some did comment stating they would be happy to pay more for products if there was a minimum wage increase.

“I’d rather pay high prices for goods and services than have my taxes increased to support welfare for those that have jobs.”

“I believe minimum wage should of kept up with inflation. How else are regular citizens suppose to afford the things they need in life?”


What are your thoughts on the minimum wage?



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LOTFI: Minimum Wage Increase Will Destroy America’s Poorest


NASHVILLE, February 23, 2014– Democrats have stirred the pot (yet again) for a minimum wage increase. It is of paramount importance that people attain a basic working knowledge of the laws that guide labor markets. Democrats stress that increasing minimum wage will lift people out of poverty. This is not true. In fact, a minimum wage increase will hurt the very people we are told it is designed to help– America’s poorest.


When most people think of supply and demand they associate the idea with goods and services, which they pay for with their money, such as cable television, groceries and utilities.

The majority of Americans understand that if a drought occurs then many plants will die. This will cause fewer plants to yield produce, which will cause the supply to be limited. Thus, the price will increase due to movement relating to the supply curve. They also understand that if Apple’s next iPhone was filled with new, groundbreaking technology then the price of the iPhone 6 would soar due to movement relating to the demand curve.

However, many people do not associate minimum wage with supply and demand. This should not come as a surprise. The vast majority of Americans aren’t business owners. Due to this lack of experience, most do not understand the market laws at play.

Supply & Demand

The fact is that minimum wage is a perfect example of supply and demand. In fact, it’s Economics 101. Employees are suppliers of labor (supply). Employers are the consumers of that labor (demand). Since the minimum wage was created in 1938, economic dead weight loss has ensued.

The minimum wage is a price floor. This means that a firm can pay no less for your labor than what the government dictates. How is this a problem? It prohibits voluntary labor contracts.

For example, say a 14-year-old kid wants his first job at McDonald’s. The candidate has no skills, he’s never worked before, is vastly inexperienced and presents a sizable risk to the firm. Due to the fact that the government has now mandated the employer pay the 14-year-old $15/hour the firm decides to hire someone with more experience. The kid voluntarily offers to work for $7.50/hour. However, the government won’t allow it. A potential contract has now been killed and economic dead weight loss is the result.

Furthermore, firms can only pay wages that are below their average revenue product of labor (ARPl) curve. In layman’s terms, if the firm only nets $1.00 of profit per unit of labor at a cost of $9.00/unit then a $1.10 increase in each unit of labor will net the firm (-)$0.10.

If labor currently costs $9.00/unit and the government mandates firms pay $10.10/unit then the firm must do one of three things. The firm will either raise prices in order to maintain all units of labor, fire employees (results in decreased production–supply), or fire employees and require that current employees increase output to compensate for lost labor units. Yes, even a $0.20 increase will have this effect on some firms.

Various firms will react differently. The net result is lost jobs and increased prices for goods and services (inflation). Higher prices for goods and services are further accelerated by the fact that some firms are now producing less due to higher variable costs. This causes movement with relation to the supply curve and prices increase with demand remaining constant.

Democrats have attacked this as being a fallacy. It is not. It is an economic truism. The Congressional Budget Office has already verified that increasing the minimum wage right now will destroy 500k-1 million jobs. One million people out of work? That’s exactly what we need going into a quasi recovery from the recession.

America’s Poorest

As stated previously, wage floors hurt America’s poorest. Many individuals seek “black market jobs”. These jobs are off the radar of government’s restrictive wage laws. Think of baby sitters, handymen, maids, farm hands and other similar “cash under the table” jobs.

The majority of employees in this market lack the training and experience to seek more lucrative jobs. Therefore, they often find themselves in poverty and unable to climb the career ladder.

As noted before, an increase in the minimum wage will cost jobs. One million workers who were previously employed at the previous wage floor are now unable to find work. Fired because they lacked the marginal value necessary to maintain employment, these individuals will have an extremely hard time finding work at the new wage floor.

What will they do? They flood the secondary labor market looking for cash jobs because they cannot find employment at the new wage floor.

This causes a surplus of labor (supply) in that market. This means that firms, as consumers (demand) of labor, can now pay less for each unit of labor due to surplus conditions.

America’s poorest are now in a far worse situation than before due to the new labor surplus in their market. Their wages are now being reduced and increased competition for available jobs now exists. This is then compounded with inflation from the minimum wage increase, which causes the purchasing power of the dollar to decrease. The net result? America’s poorest are now making less and their dollar is worth less.

To promote a minimum wage increase as salvation for America’s poorest is purely insidious. In reality, the effects on these Americans is simply detrimental.

The Solution

The minimum wage has been raised countless times since its creation. Yet, it doesn’t seem to be working. If raising the wage floor worked then people would no longer be in poverty and all would be prosperous. The solution is simple. America must return to sound fiscal policy and abandon the Federal Reserve’s fiat monetary system. Until this occurs, minimum wage will continue to be adjusted upwards. Soon enough the wage floor will be $100.10/ hour and a happy meal will cost $70.00. The wage is not the problem. It’s the money itself.

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(VIDEO) VP of White Castle says, “$15 minimum wage means layoffs”

President Obama is now shifting his attention to advocate for an increased federal minimum wage. According to the Guardian,

“The federal minimum wage currently stands at $7.25 an hour, or about $15,000 a year. Obama renewed his call for it to be increased, and has already indicated he will back a Senate measure to increase the minimum statutory pay to $10.10. Republicans in the House oppose the measure, which they say would be harmful to business.”

“To more than double the federally mandated starting wage wouldn’t be bad for White Castle, it would be absolutely catastrophic,” Jamie Richardson, vice president of White Castle, told CNBC’s “Closing Bell” on Wednesday.

Economist Paul Krugman, disagrees with Richardson and is pushing for increased minimum wages.

But most classical economists disagree with Krugman. When the government increases the minimum wage artificially above the market price for unskilled labor, it causes an increase in unemployment and hurts low-skilled job seekers.

Economist Thomas Sowell states in Basic Economics, “Unfortunately, the real minimum wage is always zero, regardless of the laws, and that is the wage that many workers receive in the wake of the creation or escalation of a government mandated minimum wage, because they either lose their jobs or fail to find jobs when they enter the labor force.”

Those who are fighting against a minimum wage hike believes that a federal minimum wage law is misguided, and only helps one group of people: politicians.

Classical economists agree that increasing the minimum wage is a bad idea because it increases unemployment. An increase to the minimum wage decreases the demand for labor and increases the supply of labor which causes low-skilled workers to lose jobs and prevents others from finding new ones.

Economists like Sowell notes that Switzerland, one of the wealthiest nations, does not have a minimum wage and has a very low unemployment rate. So why do politicians, and some economists, advocate a minimum wage increase?

Sowell believes that it’s simply politics. The fact that the economic data indicates the minimum wage actually hurts low-skilled workers is not politically feasible juxtaposed with the idea of a social “safety net” for low-skilled workers.

Despite the economic data, the debate on increasing the minimum wage lives on. Princeton economist Alan Krueger told CNBC that he supports the President’s proposal to increase the minimum wage.

“I think our country will do a lot better if we have more shared prosperity,” Krueger said.

“I think we’re hurting opportunities for the next generation because the bottom half of the country has struggled so much over the past couple of decades,” the former chairman of Obama’s Council of Economic Advisers added. “Raising the minimum wage a modest amount, like the president proposed, helps lower-wage workers and I think that will be good for our economy.”