How Business can survive the $15 Minimum Wage Hike
On Thursday, the U.S. House of Representatives voted to pass legislation that would raise the federal minimum wage from $7.25 to $15 over the next six years. These are the progressive plans that have the youth of America believing that working in a coffee shop is a career, and not a means to an end.
Malcolm X said it well in a speech at UC Berkeley in 1963, where he chided the white liberal as being the destructive force to the black people. The prophecy of Malcolm X has deleteriously hit the black community again in the form of eternal low wage jobs. The Raise the Wage Act was introduced to Congress by Rep. Bobby Scott (D-Va.) in January. It again proves that his education at Harvard, now a cesspool of lower learning, means little in the real world of business. The photo ops of Nancy Pelosi and other white women holding black children in glee only further support the Malcolm X thesis.
There are actually learned men who are in the field of economics who would today support such theories that a minimum wage increase will disproportionally hurt the ones it is meant to help. An overwhelming majority of American labor economists agree that minimum wage hikes are an inefficient way to address the needs of poor families, according to a national survey of the American Economic Association (AEA).
Look, no one wants to see people struggle financially, but this socialist move of regulating the market price of labor will only exacerbate the situation of low-skilled workers. More than two-thirds of labor economists (68 percent) believe a mandated wage increase will cause employers to hire applicants with greater skills. This is where capitalism steps in and trumps government regulation. Simply, businesses will automate positions which are now performed by low-skilled workers, which was prompted by the very legislation set out to help them.
This is what is known as classical, or real wage unemployment. Classical unemployment is caused when wages are too high. This explanation of unemployment dominated economic theory before the 1930s, when workers themselves were blamed for not accepting lower wages, or for asking for too high wages. Research from David Neumark at the University of California at Irvine shows that for every 10 percent increase in the minimum wage, low-skilled unemployment increases by 8 percent.
Based on these results, the houses wage vote is bad news for African American teens who already suffer unemployment seven times higher than the rest of the nation. Your own liberal federal bureaucrats even agree. A recent report from the Congressional Budget Office concluded that a raise to $15 an hour would cause the loss of 1.3 million jobs. Statistics can be used by either side to put forth their agendas. However, business will do what business has to do to survive in a capitalistic system, which by the way, a majority of Americans still agree is the preferred form of economics.
While the Democrats have control of the house and this bill, they now pass the baton to the Republican-controlled Senate, where it is expected to face stiff opposition.