Why Raising The Minimum Wage So Quickly Is Bad For Everyone

The minimum wage issue has recently been debated in the Senate and after some debating and amendments; the minimum wage will increase to $ 5.85 per hour, effective July 24th 2007, $ 6.55 per hour, effective July 24th 2008 and $ 7.25 per hour, effective July 24th 2009. Since the minimum wage law was passed…

The minimum wage issue has recently been debated in the Senate and after some debating and amendments; the minimum wage will increase to $ 5.85 per hour, effective July 24th 2007, $ 6.55 per hour, effective July 24th 2008 and $ 7.25 per hour, effective July 24th 2009. Since the minimum wage law was passed in 1996, there has been nine attempts to raise the law and nine attempts failed. To the low income worker a sigh of relief can be heard. The increase in pay allows the lower skilled workers to a greater disposable income and spend on essential items or save for the future. Society benefits from greater revenue in sales tax from the increase in spending. This would help fund need programs in the community.

These are a few of the assumptions that democracies and anyone who is pro an increase in minimum wage wants everyone to believe. This is so far from the truth that it is appalling. John Edwards is so animate that he introduced an amendment to assist with the passage of the bill. He decrees the lower class workers need it; they really need this to happen. John Edwards must have failed Economics 101 and slept right through a finance class, since this is not what the lower class impoverish workers need for their salvation. Basically, Democrats are saying more money will save you from your money worries and here are a few nickels and dimes to appease you.

Economics teachers us about the law of supply and demand. A business that employees worker at the new wage of $ 7.25 are forced to raise prices beyond their normal rates. Good old inflation allows business owners to raise their prices at least 3% a year, which is the average inflation rate in the US. Employee's wages is calculated as a variable cost from accounting, and variable cost can be reduced when its price is excessive. The variable cost is figured into the price of the product or service of the company. Employers either have to raise the price of their product to maintain their profitability or lay off employees to stay competitive with other firms.

A business's value chain analysis will appear extremely expensive at any point where workers handle their product from harvesting their raw materials to serving the final product to the consumer. A company that desires to maintain profitable analysis of their value chain to determine the cost drives and implement ways to reducing their overall cost. The increase employees wages, which is a variable cost, has increased dramatically over a period of time, these costs are the first to be reduced by lay offs. Not only lay offs, but reducing the total workforce for their lower paid workers. Have you ever waited in long lines at a fast food restaurant or wait to be located at a sit down restaurant? Now imagine fewer workers due to costs and more of your valuable time wasted for the same service.

Raising minimum wage is not the solution to the low income workers; This is a political smoke screen by the democrats to pay off this sector of voters. Education increases individual's value to employees, not legislative from Congress.