I am not writing this blog to argue with what is called a “Living Wage” nor am I here to adamantly say no to any increase in a minimum wage. What I wish only to do is to make a point of how “good” intentions of the government never turn out good.
This point almost seems contradictory. As a Christian, I understand that increasing the minimum wage would mean more money for the employees. Altruistically, it seems fantastic. However, pragmatically, it has the potential to be counterproductive.
The nonpartisan Congressional Budget Office came out this week and said that the plan by President Obama and fellow Democrats to increase the minimum wage to $10.10 an hour would cost roughly 500,000 jobs but increase wages for roughly 16.5 million Americans. What makes matters worse is that the CBO analysts said their estimate of employment losses was approximate. They said the actual impact could range from a very slight employment reduction to a loss of one million workers.
“While helping some, mandating higher wages has real costs, including fewer people working,” said a spokesman for House Speaker John Boehner, R-Ohio. “With unemployment Americans’ top concern, our focus should be creating — not destroying — jobs for those who need them most.”
Though I agree with an increase in minimum wage, now does not seem to be the time. The Obama administration believes that increased wage would decrease the poverty level. However, an astute analysis of the numbers clearly shows that most of those under the poverty level are unemployed. Thus, by destroying more jobs, this number is bound only to rise. Simply put, it’s a totally nearsighted Obama plan with yet again far reaching negative, economic consequences.
If the government really cared about business, they would instead create economic incentives for companies that would entice them to increase their minimum wage. There could be tax brakes, savings initiatives or tax credits that would make raising employee’s both attractive and economically solvent. It is simple math. However, the government, unlike private businesses, does not understand the bottom line. They base their economic decisions on philosophy and ideology instead of hard economic truths. And now you understand why we are over 17 trillion dollars in the hole.