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Minimum Wage Laws? NIMBY

Raising the minimum wage sounds like the obvious answer to help lower class families out of poverty. The current minimum wage, enacted a decade ago, is $7.25 an hour (with exceptions). Current proposals at local and state levels as well as at the federal level suggest that the minimum wage should be $15.00 an hour or higher. Does that seem a little high to you? Does it seem like it could be higher? To me, this proposals seems a little bit too arbitrary for me. 

Current Democratic presidential-hopeful Bernie Sanders argues that the current minimum wage is a starvation wage: an argument that I do not disagree with. I would never advocate that your primary income be based off of a full-time job that pays you minimum wage. You can survive off of the current minimum wage, but you would not be able to independently care for yourself and save money. 

However, if you wanted to take on a job that only pays you $5.00 an hour, the government should not prevent you from doing so, especially in a self-proclaimed free country. Most people would never accept only $5.00 per hour for their labor, but if they wanted to, they should be able to. 

Remember, the current minimum wage ($7.25 an hour) only became law ten years ago. Ten years from now, $15.00 an hour will feel as low as $7.25 an hour does. This is because an increase in the minimum wage will inflate the cost of goods in the market. Initially, the increase will feel good for low-income workers and will feel bad for small business owners. Then the cost of everything will inflate for two reasons. First off, the increase in the minimum wage forces businesses to increase pay for all workers that are currently making less than $15.00 an hour. This increases the cost of production thus increasing the cost of the final product. 

The second reason that costs will inflate in the market is because more people will have more money very quickly. This will allow for them to make purchases that they may not have been able to make prior to the change in the law. As demand increases, the supply will decrease which will drive up current market prices. Anytime the government intervenes with the economy, they influence what should be a self-correcting economic system. 

I propose that we abolish the minimum wage completely. Where do lawmakers get their arbitrary wages from? Why $15.00 an hour and not $15.28 an hour? It appears that lawmakers reached into thin air and selected an hourly wage that was both easy to campaign on and reasonable enough to become law. Politicians can tell you that they looked at the costs of living and that $15.00 an hour is what you need to be making to support yourself, and they might be right. However, accelerating an increase in wages through government action is not going to solve anybody’s problems. 

I propose that we let the free market dictate fair wages. As producers of labor, low-income workers are still free to negotiate their wages. Corporations may tell you that they can only offer you $8.00 an hour, but you have the right to turn down the offer and seek employment that pays your asking cost. Most jobs do not even start people off at the minimum wage because most people will not work for only $7.25 an hour. In order to compete in the market, businesses must have competitive wages to attract employees. 

The market decided that the government mandated $7.25 per hour was too low. The market responded by offering wages above the minimum wage that were attractive enough to potential employees. It has taken nearly a decade for the market to correct the damages that the government imposed on it via federal legislation. Now that competition is once again occurring in wage wars, politicians are suggesting that the government intervenes again. Why? 

Running on a platform of increasing the minimum wage as a means to helping low-income workers out of poverty is a popular platform to run on in the Democratic Party. Politicians advertise themselves as being for the people, when, in reality, these proposals are destructive to the economy.

If WE the people want higher wages, WE the people need to operate in the free market and refuse to work for less than our worth. In a free society, a business should not be required to pay employees a wage that they cannot afford and individuals should have the ability to negotiate their wages, whether that be higher or lower than the federally mandated minimum wage.

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