“Loop”

 

Well, just like Spring, the Federal Minimum Wage is coming around. Again.
 
Since the mid-50s, the Federal Minimum Wage has been raised numerous times. Each time it is raised, the argument is that raising the Minimum Wage will “bring millions out of poverty.”
 
O.K. If that is true, why are millions STILL in poverty?
 
Now about starting with facts: About 2% of the US hourly wage workforce is paid at or below the Federal Minimum Wage. (I checked the number with PolitiFact, which fact-checked a comment by Ohio Republican Senator Rob Portman.)
 
Now the Congressional Budget Office says the proposed Federal Minimum Wage would raise 800,000+ out of poverty at a cost of 500,000 who would lose their job. So, some would do better at the cost of others becoming even more impoverished.
 
Now obviously, that is always true, or the Feds would simply raise the Minimum Wage to $50.
 
As an employer for many years, and as a turn-around manager for the Federal Bankruptcy Court, I always wondered how someone who has never seen my business, or met my employees could possibly know how much they are worth to the company.
 
The worse part of a Minimum Wage is the income ratchet, which relates directly to everyone in the food chain. If you raise the MW to $15 from $8, what happens to the employee who was making $10. I’ll tell you, they are going to come to the employer and say, “last week I was valued by the business $2 more than John, but by government fiat I am suddenly worth $5 less? I want a $7 raise!”
 
Then, in comes Mary…
 
Up goes the price of the product, all products, and guess what?
 
The guy making $15 is back in poverty, requiring a $20 Minimum Wage.
 
And the cycle repeats, or in computer programmer-speak, Loop 

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