Why Raising the Minimum Wage is a Bad Thing

The minimum wage has been raised again, as part of a three step process that the Democrats put into policy when they first took control of the House and the Senate.

What is in it for them? Don't tell me that really care whether the pizza delivery boy makes 5.25 or 7.25 an hour.

They think that this is all a big popularity contest. they install these laws thinking about the votes they are winning over, not the long term consequences of their actions.

Here is why raising the minimum wage is a bad thing:

Let's say that you own an ice cream stand. You usually hire 8 high school age kids each summer. At $6.15 your labor costs for a 40 hour week would equal $1,968.00. So you already have to sell a heck of a lot of ice cream to make any sort of profit.

Now Big Brother comes along and demands that you now pay those teenagers $7.25 an hour. Your weekly labor costs are now $2,320.00. A difference of $352.00. So where is that many going to come from? You cannot lower your profit margin, because your family depends on that money. You have two choices: decrease your labor costs or increase your prices. Either one is bad for business. If you let an employee go, customers will have to wait longer to be served. If you raise your prices, you will sell less ice cream.

Most employers choose option A and let employees go. If you look at statistics here, there is a direct correlation between unemployment and minimum wage. As one goes up, so does the other. Doesn't sound like such a good idea now, does it?

It most cases, the consumer takes the bullet. Consider Walmart: Remember when everyone was trying to make Walmart out to be an evil empire? Never mind the fact that they employ millions of people nationwide. Voluntarily, I might add. The solution to "punish" Walmart was to raise the minimum wage. The one thing that they did not take into account is that Walmart answers to a board of directors and stock holders, just like any large company. Do you think that the board or the stock holders are willing to take a hit on their return? Nope! So what do they do? Easy, they sell enough product that they can easily pass the cost off to the consumer by raising their prices by a penny or a fraction of a penny across the board.

So who ultimately pays the cost of a Minimum Wage hike? YOU! The consumer. Not the big bad employer. Not the greasy politician. You. How do you like them apples?