Minimum Wage: To be or not to be... Raised.

Ahh... The ever present battle of classes, proletariat vs. Bourgeoisie. Rich vs. Poor. Well, the flame may have been ignited once again. The wage workers of America are working to raise minimum wage. Since this argument has many angles I will try to be as objective as possible towards the entire topic.

The first major point that can be made is that when the average amount of money workers make increases, the more things tend to cost. This is whether the companies are forced to because of the increase in wage, or just to match inflation. This is a rather basic economic concept. I have heard a lot of Democrats responding "Why does that have to happen?" when presented this argument, acting as if this concept is purely the work of Republicans trying to make Democrats look bad. This is not the way it works though, the right cannot control the flow of the economy, as much and many Bush haters wish the did. The way it works is businesses pay more money for workers, so to make up for the added revenue, the prices on their goods and/or services rise, maybe not in proportion to the wage increase, but enough to relatively match the profit margin they were pulling in before, because to them, why mess with a good thing? 

So other than purposefully increasing inflation, hereby naturally increasing national debt, and disrupting the flow of business, what else could make the wage increase look bad? Well, maybe it won't be as catastrophic as some predict, but it will cause some fiscal problems. If wages increase, then there is more money in circulation, which is good for the economy, temporarily. After this money flows through regularly for a set amount of time, the market will balance itself out, with inflation equaling out the wage increase, putting a $10/hr wage at the equivalent of $7.85 (or $7.95 depending on your state) This means it only feels like you're making more. Now, there is no sure fire way of telling how long the market stimulation will last, and it could actually be a substantial boost to the economy over the course of the next year. 

Now, to look at the ups of minimum wage increase. Well... people get more money. Regardless of inflation or not, if someone has $100,000 in their bank, they're gonna be happy, but $1,000 water bills aren't on the top 10 list of things consumers love. So, people feel like they make more money, but spend more too, what could be good about this? Well, motivation. If you're a teenager looking for a job and hear "Now hiring, $10 an hour!" You're jumping up looking for this job. People who just aren't looking for jobs, because even if they work they still are in poverty, will (should) get up and look for jobs because now, they will be able to support themselves without the governments help, and isn't that the American Dream? Of course the novelty of increased wages will wear off, and the nation will return the the status quo. Putting the question on this topic at, is the possibility of short term economic stimulation worth the possible long term economic ramifications? I guess that all depends on how you see this playing out. So respond with what you think, E-mail me ideas for new topics, and have fun discussing.

-Jake