I am not an economics major, or even a major in any field relevant to the economy or politics, but it is topics and controversies like this that make me wish that I was. I do not, in any way, shape or form, support President Obama’s platform to raise the national minimum wage from $7.25 to $10.10 nor do I understand how our Commander in Chief — who is supposed to be knowledgeable in the realm of economics — can see this as a good idea.
Contrary to the popular belief of what the conservative opinion is, my reasons for thinking this way are not heartless, selfish or ignorant of social conditions in the slightest. I believe in being rewarded for hard work just as much as the next person, but the current minimum wage is set so “low” for reasons that are deeply important to the welfare of the American economy.
Fundamentally, I agree with the president when he says, “If you work hard, you should be able to pay your rent, buy your groceries, look after your kids,” to the highest degree. I do not believe that poverty should be a way of life for anyone and my heart goes out to those families across the nation who are living from paycheck to paycheck, struggling to make ends meet.
Though the president claims that raising the minimum wage will be the answer to these families’ prayers for reasons I will delve into later, I think that this would be poisonous to the economy and that a better solution would be to simply lower taxes across the board — if you don’t believe me, take some time to investigate the economic success of the states who have no implemented state income tax. Though it is quite complex, the positive influence that the lowering of taxes has on not only the state of the free market,but the national debt is quickly evident.
Why? Logistically, it does not take an extremely educated person to realize that the economy is much healthier when citizens have more money in their pockets to put back into the market, so long as it wasn’t put there by an alternative enforcement that also causes inflation, as raising the minimum wage certainly would, though many definitely do not like to hear me say that.
There are two strong, capitalistic reasons to discourage the boosting of the current national minimum wage. The first is, as I stated above, the fact that this would cause inflation. If only the bottom portion of the working class starts to make more money, then the extra cash coming out of it will cause the price of everything else goes up with it.
That means groceries, rent, energy prices and, yes, anything required to raise a child, Mr. President. In some cases, those currently earning above minimum wage will not earn any more, causing a greater portion of the working class to combat inflated market prices. The American dollar will continue to lose its value at a much quicker pace than it is as of today. Now why would we, as a nation, want to cheapen the value of our currency in order to fix a problem that will only reappear in a few years? Once the price of everything on the market has been readjusted, those below the poverty line will end up struggling just as they are now.
The economy will not be the only thing to suffer these negative consequences, small businesses will as well. Many small business owners will not be able to afford to pay their workers more than they already do and will most likely have to let some of the workers go, adding to the unemployment rate. Think that’s greedy? Maybe a little selfish? Perhaps it is, but that is how they make their living and how they feed their children, Mr. President.