February 13, 2021

Fight for $15: The Compassionate Lie

More money always sounds good — except when it results in a loss of livelihood.

Speaker Nancy Pelosi says that Americans will see the $15 minimum wage increase in the latest stimulus package. But a study by the University of Michigan and the American Enterprise Institute reveals minimum wage hikes kill job growth. Even a few House Democrats have voiced their opposition to the increase.

Those in support of higher hourly wages don’t understand the pushback. I’m here to map out how the “Fight for $15” is a compassionate lie at best.

Imagine that you run a lemonade stand. After operating costs, you only have $20 left. You pay your two “employees,” invest some, and keep the rest. Down the line your two employees demand more money (despite not producing more in value). They say they deserve a living wage. So you decide to pay them a bit extra, meaning you’d have to dip into your own money. At some point, this payout becomes unsustainable. After a while, this business becomes an expensive hobby with no return — and earning a return is the very point of operating a business. Eventually you have to make a hard decision — keep the hourly wage, but give one of your employees the pink slip. You’ll have saved the business and one job at the expense of lost productivity and another person’s job. The remaining employee now has to do the work of two people to keep up with the lemonade stand’s demands. It is a lose-lose.

Now envision that same scenario but for large enterprises. Corporations across the nation are bracing themselves for the impending financial hit by way of increased labor costs. Some are even preparing to lay off whole teams and departments, all to account for a $15 federal minimum wage. Initially, it may seem fair to one employee, but not to the others who have lost their jobs, not to the remaining employees who need to work harder, and not to the employer who would rather keep as many people employed as possible while pursuing his own returns.

Those who argue for the minimum wage repeat the same line: “A company that can’t pay a living wage doesn’t deserve to be in business.” They never think about that employee who was happy with his income until he lost his job. What do these progressive wage hikers say to their colleague who has to pack his or her box and apply for welfare? Is that the preferred outcome? Higher wages for me but not for thee?

Furthermore, a higher minimum wage does nothing for people with few to no skills. As businesses grow more and more sophisticated as they find loopholes needed to stay afloat, they’ll opt for automation and more efficient methods to get the job done — effectively ruling out any need for the little guy starting out. Let’s be honest: A budding cashier can’t compete with a self-checkout when you count the nickels and dimes. Not to mention that automation reduces the chances of workplace injuries and such. A computer doesn’t need time off or benefits. Therein lies the disadvantage for those needing essential workplace skills to truly compete in a capitalist society.

The bottom line is that the true minimum wage is and should be $0.00. Competition is what makes America great, and putting a few people ahead of the race (by way of an increased minimum wage) only leaves many others behind.

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