On Friday August 8th, Jennifer Avilez wrote an article for her blog entitled Minimum Wage & Inflation. In her article she argues that Texas residents earning the minimum wage should receive a raise because the cost of living is too high. In addition to raising the minimum wage, she also argues that inflation should be controlled. By increasing the minimum wage and controlling inflation, Jennifer believes that low wage earners would have more spending power and be more able to better themselves. Jennifer does realize that increasing the minimum wage could result in price increases for goods and services, and that this would result in no net gain for minimum wage earners. Her solution to this problem is simple. Jennifer argues that businesses should not pass the increased cost of labor to consumers. Jennifer’s position on the minimum wage is understandable given the fact that she identifies politically as Next Generation Left. However, I have to respectfully disagree with her.
The threat of cost push inflation is only one problem with raising the minimum wage. In his article How Minimum Wage Works on Howstuffworks.com, Dave Ross states that a fixed minimum wage hurts the low wage earners it claims to protect. According to this reasoning, the minimum wage is an artificial value for a worker imposed by the government. The real value of any worker should be decided in the open market. Ross uses the example of a young untrained machinist. The factory owner knows that the young untrained machinist will not be as productive as an experienced machinist, so the factory owner will pay the young untrained machinist a lower hourly wage. If the factory owner is forced to pay the young untrained machinist an artificially high minimum wage, he may choose to not hire the young worker. The end result is that the young worker is unemployed instead of gaining experience. Competition in the free market is the best way to ensure a brighter future for all workers.
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