Why governments like to raise the minimum wage

They care about you, or at least that’s what liberals say when they advocate for things like government-sponsored health care and raising the minimum wage, are asking the wealthy to pay their fair share.

These are all things socialist nations claim to provide their citizens, and we see how that works in Cuba, Venezuela, North Korea and China. The short answer is not good.

But why would Americans embrace the concept of raising the minimum wage?

A little research will tell us why, and it’s not the benevolent state thinking of our best interests.

First, let’s think about the concept of minimum wage in the first place.

Not every job was designed to provide a living wage.

Teenagers living at home with their parents pay no rent, no utilities and more than likely no insurance or other expenses that adults have to pay.

But teenagers benefit by working. They earn some income they can use to either help subsidize their family or to buy their own clothes, go to the movies or even make a car payment.

In any event, they don’t need or seek a “living wage.”

Working part time at the local theater or in the food industry provided them an opportunity to make some money while learning the responsibility of having a job.

A lot of these jobs would begin at or near minimum wage.

And that’s what it was for — to earn some spending money.

Why is it, then, that we have converted these teenage jobs into lifetime careers? When did flipping burgers or busing tables end up having to be a job that supported an adult’s entire family?

It starts with poor policies pushed by governments, both federal and state. When we opened our market to cheaply made Chinese and other enslaved nations’ goods, we started to lose the industrial jobs that made America strong.

From technology to ball point pens, enslaves socialist labor would always be cheaper than American labor. Americans expect vacations, paid time off, health insurance, retirement plans and high wages.

Cubans earn about $25 per month, which is enough to buy a little more than 10 chickens.

In China, the average monthly income is $1,313. No American worker providing for a family could survive on that wage.

Because of that, Americans look the other way when they buy cheap televisions, dishes, tools and everything else from a foreign made company that put an American company out of business.

And our lawmakers know it. 

We sold Chinese consumers $195.5 billion worth of goods, but we bought $562.9 billion worth of goods from China. That’s a trade deficit of $367.4 billion. 

If every time you paid $2 to someone else and always got $1 back, how long before you go broke?

That’s where we are with China, and our leadership knows we will have to decouple our trade or demand China raise their standard of living to make trade an even balance. Both are touchy subjects politically, but the current trajectory has American wealth transfering to Chinese wealth at an alarming rate.

What does any of this have to do with minimum wage?

The jobs that used to be those teenage jobs are now some of the only jobs that can’t be lost to Chinese competition.

Working in retail, selling mostly Chinese goods, now has to support a family, so state governments like California want to drive up the minimum wage, or at least that is what they claim.

But the fact is when minimum wages increase, the price of goods also increases. The workers see very little benefit to having extra money in their pocket because the cost of hamburgers and other goods increases. Wage inflation is not different than any other inflation. Consumers end up paying more.

So why does the state push for higher minimum wages?

In California, the law went to $20 per hour.

Ironically, the former $14 per our rate was taxed at four percent for state income.

But at $20 per hour, the rate jumps to 6 percent. A minimum wage full time employee at $14 per hour paid $1,165 in state income taxes, but at the new rate, they will pay $2,496.

Also, at the state sales tax rate of 7.5 percent, when a hamburger meal goes from $14 to $20, the state will collect $1.50 instead of the previous $1.05.

So who wins with higher wages? The state does. Not the worker.

California is expecting a $68 billion shortfall. How are they going to pay for that?

Raising minimum wage is one way they get a bigger cut, and with higher prices for goods, they get another cut.

It’s easy to see why they went big. Without any other way to fill the gap, they have to placate the population into believing they can increase salaries and fill the budget deficit at the same time.

It’s the dog chasing the tail, and states like Kansas should fall for the trap.

Kansas has a budget surplus of $3 billion, and big government proponents are looking to expand Medicaid and other government programs to spend it.

We should learn from the failures in California and avoid government expansion and the false promises of social solutions. 

Whenever the government increases something, it always means less for the people and more for them.

Editor | watt@kaninfo.com

Earl Watt is the owner and publisher of the Leader & Times in Liberal, Kansas. Watt started his career in journalism in 1991 at the Southwest Daily Times. During his career, the newspaper has won a total of 17 Sweepstakes awards from the Kansas Press Association for editorial content and 18 Sweepstakes awards for advertising. Watt has been recognized with more than 70 first place awards for writing in categories from sports and column to best front pages, best sports pages and best opinion pages. Watt is a member of the Sons of the American Revolution and is the descendant of several patriots who fought for America's freedom and independence.

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