The minimum wage increase

January 19, 2007 at 3:34 pm 2 comments

Today at Moneytalk we’re discussing the minimum wage increase. All politics aside, this will be a discussion about it economically. Well, maybe there will be a bit of politicking, but we’ll try to keep it brief. We found out that Dave Ramsey feels much like we do about the topic, and after listening to his show on Monday, we were prompted to write about it. So, here we go.

Let’s first start with where Moneytalk stands on this issue. Quite frankly, we were and are against the minimum wage increase. We feel that there are far too many Americans who are looking to the government to solve their money problems. Either with social security, welfare and now wages.

We’ve been sold political garbage in that Washington can actually solve our problems. And you know what, neither Congress nor Republicans nor Democrats can. This idea though, that Washington can actually help, has stymied Americans. It has weakened people’s drive and willingness to “earn” a living. If enough Americans buy into this crap, America’s very foundation of prosperity and freedom will crumble.

At it’s core, America stands for freedom. Freedom to choose a livelihood to which no other country can compare. It is up to us to earn a buck or lose a buck. It is up to us to fall flat on our faces or to succeed. It is up us to climb to the top of the mountain, not to get a free ride to top. The minute Congress decided to raise the minimum wage, they stomped on that very freedom this country stands for. The government told us how much people should make.

Well, that’s all great and dandy Moneytalk, but where’s the economical or statistical evidence you mentioned earlier? So far it’s been political. Okay, okay, let’s share some facts with you.

According to the Bureau of Labor Statistics, 1.9 million Americans reported to have earned $5.15 per hour or less in 2006. Of those 1.9 million, two-tenths of one percent, that’s 214,000 people, actually live on minimum wage. That’s two pennies in a one hundred dollar bill. Not that these people don’t deserve a fair shot, but since when is it the government’s place, to tell 214,000 people that they should make more money? Is it the government’s job to do that? No. People don’t have to accept minimum wage or work at a place that only pays that. Ultimately, it is our choice as Americans to earn a living.

For those of you who are against the minimum wage increase because it will create job loss and puts strain on business owners. Well, here’s something to chew on.

The Oxford Bulletin of Economics and Statistics states that “most estimates suggest that each 10% increase in the minimum wage reduces employment in affected groups of workers by roughly 2%. Thus raising the minimum wage $7.25 an hour will cost 8% of affected workers their jobs.” That’s 8% of the 2.5% of working Americans. That is hardly the gloom and despair these critics claim. Not even close.

Well, we’re not done stepping on toes just yet. This topics will be discussed further, but at a later time. We’d love to hear what you have to say about this and why Moneytalk is right, or wrong for that matter.


Entry filed under: Soap Box.

Back to the grind and even a plastectomy Watch “Flat Broke: Begging And Borrowing In America” Friday on “20/20”

2 Comments Add your own

  • 1. finance girl  |  January 19, 2007 at 5:37 pm

    How about a minimum wage increase in which the employer puts the increase into a health savings account for the employee?

    Either way though I am 100% for a minimum wage increase.

  • 2. chaka42  |  January 19, 2007 at 7:27 pm

    That’s an interesting idea. How would that work though? HSA contributions come from after tax monies. The employer would then have to run separate transactions for payroll AND HSA contributions. That just doesn’t seem practical. And, in order for the employer to contribute such an increase into an HSA, the employee would have to be enrolled in a high deductible health insurance policy. I highly doubt that 214,000 people actually living on minimum wage have such a policy.

    Thanks for the input. 🙂


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