Economic Special Sauce (VIDEO)

Minimum Wage Hike Folly Explained Using America’s Favorite Food

By Matt Rooney | The Save Jersey Blog

Your friends at Save Jersey have expended plenty of digital ink over the last year explaining why the Obama/N.J. Democrat minimum wage push would represent an unmitigated disaster for our struggling economy.

Someone has to do it! SCR-1 cleared the Assembly yesterday for the second time and, consequently, it’s headed to your November ballot. The GOP (both here in the Garden State and elsewhere across the fruited plain) is dropping the ball. We’ve chosen to run with it.

But today is Friday, folks, and it’s been a looong week.

So like any good teacher, I’m going to show you a video instead of forcing a long, fact-intensive post down your throats. Your cooperation is still necessary… no sleeping! Set aside the theoretical for a moment and allow yourself to digest a real world scenario where the minimum wage hurts both employers AND the low wage workers whom it’s supposed to help.

h/t Professor Antony Davies…


Hard to argue with, right? Easy to understand, too. Now think about the full implications of another minimum wage hike in all areas of the economy…

A strong majority of minimum wage employees are unskilled, prone to move up to higher salaries within two years and rarely earning their household’s primary income. Government regulations increasing the minimum wage to a point where their labor is no longer profitable inevitably results in shift reductions. 

Younger workers are the most likely to suffer.

Remember: when Washington, D.C. increased the federal minimum wage to $7.25 from $6.55 in July 2009, teen joblessness rose from 24.3% to 27.6% over a three month period because employers eliminated their positions. Just like in the hamburger hypothetical! Minority populations were the hardest hit; black youth unemployment exploded from 38.5% in July 2009 to 49.8% by November 2009.

Why would it work this time, Mr. President? Speaker Oliver?

Fight back with facts, Save Jerseyans. For a very similar example to the hamburger hypo but with a South Jersey twist, check out our very own Ed Sheppard’s Wawa analogy.

You can also always visit our Minimum Wage Archives for all of the data, analysis, and liberal-vanquishing common sense that you’ll ever need to win a debate. It’s just basic math… not magical secret sauce.

11 thoughts on “Economic Special Sauce (VIDEO)

  1. @Arthur Everything you're saying would make sense EXCEPT for the fact that the government can't make the employer hire/keep his workforce. Watch the video in this post ^^. If it costs a hamburger stand owner $9 for Employee A to make $8 worth of burgers, then Employee A will be on the unemployment line earning/saving/paying nothing!

  2. @Arthur Maybe he is. Or maybe he's just young or unskilled. Either way, in his present condition for THAT particular job, he isn't worth $9 to the employer. If every business paid employees more than they were able to generate in profit, then we'd have a lot more bankruptcies out there! In any event, this little hypothetical demonstrates why the minimum wage is outdated and counterproductive… another example of the government pandering to interest groups and meddling in something best left to the free market.

  3. @Arthur Of course! Our culture has its problems, no doubt. But remember: the vast majority of Americans work at small businesses (not places where fancy CEOs earn millions). Roughly 20 million Americans work for companies with less than 20 employees! Those employers simply can't afford the minimum wage hike…

  4. There is another unmentioned problem with it in that it undermines the free market for labor. There are people who would be, and are, willing to work for less than the legal minimum at it's current rate. This has created an artificial bottom in the labor market, and those who do not have skills that are worth what the law requires are kept out of the market altogether.

  5. @Arthur Some could. Others can't. But unless the government wants to get in the business of controlling every private sector business decision, then legislation needs to reflect a mature understanding of human nature. Businesses exist to maximize profit. If government makes it harder for businessmen to make money, then the first ones to lose out will be employees at the bottom of the ladder.

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