As politicians look for ways to stay in their posts in government they more often focus on getting votes not solving problems. It is basic economics that as wages rise then added pressure is put on the company to control staffing. Raising the minimum wage during an election cycle is popular for the politician, but the lack of knowledge of its impact influences those who actually need the work as hiring slows down, hours are cut, and even layoff’s can occur. couple that with increased health care costs and other government business taxes and the small business is being pushed to the brink of disaster. The strength of this country is based on a strong work ethic, the opportunity for entrepreneurship, and the motivation to get out there and be your own success story. People rush to the United States from all over the world for the opportunities that we afford them here, but then we continue to stifle those who commit to starting new business, maintaining our small business infrastructure, and employing large numbers of our citizens. Government needs to stop thinking about their tricks for gaining favor and do actual strategies that can impact and bring this country back to being the great place we have loved since its founding. Let’s refocus America.
The minimum wage is going up in a lot of places, such as New York, Los Angeles, San Francisco, Seatlle and Chicago. Some workers will soon earn a starting wage of $15 per hour, more than double the federal minimum of $7.25.
But the sharp boost in the lowest legal wage is largely unprecedented, and some economist are warning of dire consequences. A new study published by the American Action Forum and Manhattan Institute finds that boosting the minimum wage nationwide to $12 or $15 would end up hurting many of the people it aims to help. Yahoo Finance has an exclusive first look at the research, which finds that a Federal minimum wage increase to $15 per hour would cost the economy 6.6 million jobs and that only 6.7% of the extra $105.4 billion in new wages would go to people in poverty.
“If you raise the minimum wage to $15 per hour, 55 million workers will see their wages affected—we looked at what happens after their wages are affected.”
The study also finds that increasing the minimum wage to $12 per hour would impact 38.3 million workers. 3.8 million jobs would be lost and only 5.8% of income gained would go to workers in poverty.
“There could be quite large shares of workers affected, and research doesn’t have a lot to say about that,” Jared Bernstein of the Center on Budget and Policy Priorities told the New York Times. Bernstein is a former White House economist who has spoken in favor of increasing the minimum wage in the past. The Economist this week issued a warning against higher minimum wages calling them a “reckless wager.”
According to information from the Economic Policy Institute, the majority of those who will be impacted by a raise in minimum wage to just $12 will be white women with at least a high school education.
“The idea was to take these ideas at face value,” says Douglas Holtz-Eakin, president of the American Action Forum, former director of the Congressional Budget Office and economic advisor to President George H.W. Bush.
“It’s a strange story,” says Holtz-Eakin. “We have somebody who otherwise would have been hired and they don’t get a job. The person who keeps their job gets a raise so we’ve essentially taken the money from somebody who is out of work and given it to somebody who has a job.”
Holtz-Eakin believes that over the long term, companies would find ways to permanently scale down their labor force by automation, outsourcing and demanding an increase in productivity.
“If you’re raising the minimum wage in a place like New York City which is already a relatively affluent high-wage area it has a smaller impact than if you raise it in some place that is far less affluent, like a small town in the south.”
As Jared Bernstein points out, economics isn’t an exact science and the effects of raising the minimum wage to $12 or $15 will soon be felt, whether they’re negative or positive. Seven Nobel laureates in economics have proposed an increase in minimum wage saying that there would be little impact on employment when wages are already so low. According to the Center for Economic and Policy Research minimum wage hikes in the past have had no discernable impact on employment.
See the actual article and video on Yahoo.Finance.com