One of the Democrat’s campaign promises could prove costly for America
The idea of raising the Federal Minimum Wage to $15 has been a talking point for Senator Bernie Sanders for years. When he dropped out of the 2020 election and backed Joe Biden for President, you just knew this was one of the promises he expected in return from a newly elected President Joe Biden. There are very few people who think the increase is a good idea….those unskilled workers who will be paid the new rate and a handful of Left Wing Dems who have been promising the new Minimum Wage to their excited followers.
Before we get into the cost to the country should this become law, let’s look at the basics of the Minimum Wage:
1. It was never meant to be the wage of the single earner of a family of 4. Sanders always talks about how this rate is barely sufficient to feed a family. He is right. It was never meant to nor should it.
2. The Minimum Wage is designed for young people starting to work and for older people with a part time job to supplement their retirement or Social Security.
3. The Minimum Wage is not designed for high skilled or professional employees. If you are only suitable for a job that pays Minimum Wage, you need to invest in some training to prepare yourself for a more demanding higher paying job.
4. Raising the Minimum Wage to $15 is not going to put more money into the pockets of many, it is going to put many out of a job.
The CBO (Congressional Budget Office) is supposed to be non-partisan and look strictly at how a political decision is going to impact the country. In this case, the news is not good. The CBO says an increase to $15 in the FMW will result in the loss of 1.4M jobs….that is 1,400,000 people put out of work to give others a raise. Small business will be impacted the most. Incomes are on the low side, costs are high, profit margins are thin and this will put a burden on them that they will not be able to pass onto their customers. Employees will need to be cut.
In a simplistic example. An auto parts retailer has three drivers on duty at any time. Currently they are making $10 per hour or $30 per hour for the trio. At $15 per hour, they each would be happy but somebody is going to have to go. The trio now cost the dealer $45 per hour, a 50% increase. He cannot pass that cost onto his customers so one driver out and the other two remaining drivers will have to just be quicker and work harder….or their customers will have to be satisfied with a lower level of service.
The Minimum Wage should never be dictated by the Federal Government. One rule rarely works across the entire country. This is something for the states to decide or better still, let the free market set the rate. This is just another example of Big Government sticking its nose where it should not be, and no body comes out ahead except the politicians who can say I fulfilled my promise….at who’s cost?