Anti-Minimum Wage Legislation

Rarely will you see something political posted on my blog but I absolutely have to respond to the minimum wage legislation that will be on the Oct. 6 ballot.

In a word, it is wrong.

Why?

Speaking from a strictly economic point of view (which is my degree, thank you very much), increasing minimum wage in the manner that is being specified to the amount specified will damage the economy far worse than the benefits it will bring. Let me give you a great example, how many of you have to wait in line at the grocery store, regardless of what time of day it is? That's what I thought. Now, those cashiers make anywhere from $5.15 to $11/hour, with the lower seniority people generally getting more hours because they make less money, which means more profit for the grocery store. Now, bump up their hourly wage by $2/hour. What happens? That's one less cashier per day and your prices will increase at least 10%. Why? Grocery stores are all about minimizing cost and maximizing profit. If you force them to increase costs, they will have to find an equilibrium, where they can once again maximize profit. This will mean less jobs, fewer hours and higher prices, which really is why the minimum wage legislation exists, isn't it? If something doesn't work at your house, do you keep it? I don't, so why should the minimum wage legislation stay? That's what I thought, it shouldn't.

I hope you enjoyed your economics lesson for the day. Keep in mind costs do not equal profits. Profits will always exceed costs.