| Minimum wage and someone else’s money |
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| Written by Isaiah Kellogg | |
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Missouri’s upcoming election includes a ballot measure to increase the minimum wage in Missouri to $6.50 per hour and increase it every year. Analysts are expecting it to pass easily and there has been virtually no debate on this subject with everyone focusing on the stem cell amendment and to a lesser degree the tobacco tax increase. I think the lack of discussion on this subject is alarming, since it will have a greater impact on the state than any of the other ballot measures. Americans in general are a very generous people, especially when it comes to giving away someone else’s money. And there is no bigger “someone else” than businesses. This increase in the minimum wage will increase the operation costs of a business by $1.35 per hour per minimum wage worker. Do people think all this money will magically appear from nowhere? The money has to come from somewhere, and it comes from increasing prices. It’s not just the price of fast food that will increase. There are dozens of minimum wage workers contributing to the cost of everything you buy. At the factory where your stereo was made, there are minimum wage assembly line workers, janitors, and clerks. When it was shipped, it was probably processed and loaded on trucks by clerks and stockers in a warehouse cleaned by janitors, all making minimum wage. Then when it arrived at the store, it was received, stocked and sold by employees making minimum wage. The price of your stereo must increase to pay all these people their extra $1.35 per hour. Granted that many of those people are earning more than minimum wage, but a minimum wage increase will raise their wages as well because they don’t want to be making less (compared to minimum wage). In this way, the price of all goods and services will increase so that the price of living has increased along with minimum wage – the people who earn minimum wage are no better off than before. Although they make more, everything they buy costs more. Except now, any money they had managed to save up will be worth less than it was before, preventing them from improving their financial positions. It bothers me that Americans are so generous with other people’s money. But what bothers me more is that there are still laws on the books that were passed with racist motives. Laws like Missouri’s “Permit to Acquire a Concealable Firearm” which was passed to allow sheriffs to keep the “wrong people” from getting pistols, and it just so happened that the all-white sheriffs could tell the “wrong people” by the color of their skin. But that’s another rant for another day. Today I’m talking about the Davis-Bacon Act of 1931 which stipulated a minimum wage for federal public-works contracts. The problem at that time was that black workers were willing to work on the railroad for lower wages than the white workers. Rather than working for lower wages, the white workers complained to their congressmen, who testified: “That contractor has cheap colored labor… and it is labor of that sort that is in competition with white labor throughout the country.” (Alabama Rep. Clayton Allgood, Congressional Record, 1931, page 6513) The minimum wage law was intended to push “colored” workers out of the labor market. Even today, it pushes the poorest and least skilled people out of the labor market – the very people it was supposed to benefit. We don’t need to increase the minimum wage, we need to repeal it. It was started with racist intent, it causes inflation, it prevents the poorest from getting a job, and it doesn’t help anybody but the people who get paid to write laws. And they sure don’t need any help. |
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