Comment on Raising Minimum Wage

         The author of the blog Jennifer’s Texas Political blog writes about the need for an increase in minimum wage. While she makes some very good points, like the struggles of living with only minimum wage, and how raising it will cause cost push inflation, and a very unique idea about a floating minimum wage, I will have to disagree with her. The first thing I think people forget to realize is that a job is a choice. If you don’t want to work and get paid the amount of money they offer you (let’s say minimum wage), then you have every right not to do that job that only pays minimum wage. A wage is what a business will give an employee for the job, depending how much they think that job is worth (depending on skill, education, knowledge, how hard it is, etc.). If someone thinks that a certain job deserves more money, then don’t take the job. And if everyone thinks the same and there is nobody willing to do the job at minimum wage, then they will increase the wage until people want to have that job. So setting off this equilibrium by forcing the businesses to pay the employees more than what the job is worth (and what the employees agree the job is worth) will only cause problems including lower business profits and more business closures, cost push inflation, and a shortage of goods because there will be a lot of people that are able to buy things that they couldn’t buy previously and there is not enough stuff to go around in the short run.  So just raising the base minimum wage will make the economy stable and not help people in the long run.

             She addressed the problem with a very smart and unique model that makes the minimum wage vary with inflation so that the wage stays the same relative to the worth of the dollar. This is very smart, and is something that would happen naturally if the economy is let to run its course, but this can be done artificially also. But where problems come is if this fluctuating rate differs from the pace of how actual wages fluctuate. If Bill got a job at 10 dollars an hour, his friends might be at minimum wage which (hypothetically) are going to range from 7-9 dollars in a year with this new minimum wage model. Bill will get a raise at the end of his year (which is typical) because he has been adding worth to his job, but he will only get 10 the whole year until the raise, while minimum wage is all over the place. Bill’s friends may get a two dollar raise for the same job during the year while Bill’s wage lowers in comparison for doing the same job. So under this fluctuating wage other people might suffer in comparison.

             Other problems that can arise is unemployment because more people want these high paying jobs, or companies turning to robots because they would be cheaper. So I think a better option would be instead of spending money on wages which are just going to be offset by something else, more money should be invested in making people better equipped for the workforce. This would happen by having higher taxes on businesses, so that the money that would have went towards higher wages is just going toward better education and cheaper tuition. This way people are educated and can do harder jobs that are worth more and get a higher salary.