Working at a credit union, though it can drive some to insanity, has its benefits. I’ve worked for three different small to medium financial institutions, so I’ve come to know the culture, and trust me they’re all nuts. Anyhow, every now and then a little bit of sanity finds its way through the cracks in the walls and somebody says something that makes sense.
Today at work I was talking with one of the VP’s about the minimum wage increase (yes, I know, we are very exciting people), and was pleasantly surprised at how aware of the possibility of a federal minimum wage increase she was. Not only that, she gave a very clear reason as to why it’s a bad idea. Put simply, when the minimum wage goes up, it costs more to hire entry-level workers which in turn drives up prices and lowers incentive to hire.
Perhaps it should be no surprise Mary Fallin is opposed to the increase as well. At the National Governors Association meeting she said, “I’m concerned that it would destroy jobs, and especially small business owners can’t afford to increase their minimum wage.” How insightful. But hey, it’s true. Especially for small businesses. Small businesses like the one I work for. It’s the difference between hiring two new employees or one, the difference between running an ad on the radio and having to find ways to cut costs in order to keep prices competitive.
Smart people in general really just understand that raising the minimum wage, and particularly the federal one, isn’t at all productive in the long run.
So why do we keep having this talk every five years or so? Obama proposes an increase to $10.10 an hour, and the general idea is that this is supposed to reduce poverty. People and politicians alike need to understand that higher wages shouldn’t necessarily be interpreted as increased prosperity. Just think back a few years to when Billy Corgan was a cool kid who never had the time, and you could fill up your gas tank for fifteen bucks. You know what else you got at the gas station back then when the minimum wage was half what it is today? A full-time paid employee to operate the pump and wash your windshield. You didn’t even have to get out of the car! He might have topped your washer fluid, and you probably still had enough money to leave a tip.
Really, honestly, I survived my first year of college in 2006 on $7.50 and $8 an hour, and prices aren’t that much different now. We don’t need a minimum wage increase. We just need to listen to Tom Woods. Ten minutes a day could save the Republic. Please watch this video now: