Raising the minimum wage
President Bush today said he supported raising the minimum wage:
President George W. Bush said on Wednesday that he supports a Democratic proposal to increase the U.S. minimum wage but said it should be coupled with tax and regulatory relief for small businesses.
“I believe we should do it in a way that does not punish the millions of small businesses that are creating most of the new jobs in our country,” Bush told a news conference. “So, I support pairing it with targeted tax and regulatory relief to help these small businesses stay competitive and to help keep our economy growing.”
Democrats, who took control of Congress in November elections, have said they will push to raise the minimum wage over two years to $7.25 per hour from $5.15 per hour.
Bush appears to have GOP congressional backing as well. This statement was released today from Senate GOP leader Mitch McConnell:
An increase in the minimum wage needs to help both the workers who earn it and the small businesses that pay it. That’s why it just makes sense to pair the increased wage with tax and regulatory relief to help the small businesses that provide most of the jobs in this country stay competitive and employ even more people. The President laid out a commonsense approach to this issue, one that the Congress can pass in a bipartisan way.
But what nobody is talking about is consequences of raising the minimum wage. Heritage’s Tim Kane:
After decades of experience, everyone should know that regulating the price of labor is identical to any other price control and an especially crude way to “fix” free markets. Raising the minimum wage will hurt low-income workers, cost jobs, and hobble the American economy. Congress should know by now that bucking the laws of economics does not work.
December 20th, 2006 at 5:18 pm
Republicans For Raising The Minimum Wage
It's looking like President Bush, with some backing from Congressional Republicans, is ok with raising the minimum wage as long as it is coupled with "coupled with tax and regulatory relief for small businesses." Which is a total joke. T…
December 20th, 2006 at 9:08 pm
The Democratic Congress plans to raise minimum wage, but it is the greatest mistake they could ever make.
Contrary to popular belief, raising the minimum wage actually hurts low income workers and benefits large scale corporations. By moving the wage from $5.15 to $7.25, the 40 percent raise will impact every product in America. No one wants to pay 40 percent more for a hamburger so how will companies cover the extra cost of wages? Simple. They cut back on workers benefits, including health insurance and overtime. Companies will introduce more automation.
Of course, large companies like Wal-Mart favor raising minimum wage. They know their small competitors will have greater difficulty paying the higher wages. Wal-Mart can cover the cost by introducing self-check out counters. If you like going in to a Blockbuster Store, do it soon, as they will likely vanish if minimum wage is raised. Netflix will take over. Amazon.com, Buy.com, and eBay will see a boost in business as local businesses can no longer afford extra staff. I am just waiting to see the concession stands in movie theaters replaced with vending machines and microwaves.
Companies have interesting ways of avoiding the higher costs. They will hire part-time workers over full-time workers to avoid the costs of employee benefits. They will hire temporary workers over permanent workers to avoid paying overtime.
The real thrust is unseen. American labor is already too expensive which is why so many jobs are being outsourced and so many illegal immigrants are entering the country. Hike up the minimum wage and these problems will become worst.
Raising the minimum wage only increases inflation, not wealth. We will end up paying more and receiving less. This hurts low income workers more than the middle class or corporate America.
December 21st, 2006 at 7:14 am
Very disheartening.