The Real Cost of Raising Minimum Wage

What is the real cost of raising minimum wage?

It seems like the right thing to do – raising minimum wage to help those who are barely making enough to make ends meet.

But, someone has to pay the price … somewhere the increased costs for salaries have to be covered.

The Los Angeles city council just approved a measure to raise the minimum wage in LA to $15 per hour over the next five years, following the decisions of companies like Walmart and 29 states, plus the District of Columbia who have set their minimum wage above the federal mandate of $7.25 per hour.

From the perspective of a minimum wage earner, this is great news because their income from a 40 hour work week would increase from $290 to $600.  That $310 would really help a household pay for groceries, utility bills, etc. and maybe even allow a real family vacation.

From the eyes of the guy making lattes at the local coffee shop, this is going to be a great boost for his personal economy.

Proponents argue that raising minimum wage will benefit the whole U.S. economy … but the figures do not support this claim:  If 100% of this income (increased minimum wage) was spent on products and services, it would only equate to 1.25% of total U.S. GDP. [source]

Who will pay the price of raising minimum wage.  Who bears the brunt of this? Who covers the cost? 

Actually, we all will pay the price, including those whom raising the minimum wage is supposed to help.

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We pay it in the form of increased prices at your fast food restaurants and grocery stores, Walmart, Lowes, Barnes and Noble, Target, movie theaters, Disneyland, and well, anywhere minimum wage earners are employed.

We pay it in the form of layoffs and downsizing.

We pay it in the form of reduced hours and reduced benefits.

Of course, this is not what you hear from the proponents of raising minimum wage.  You will only hear that the poor deserve to be paid more so they can improve their standard of living.

Once people stop to think about it, they begin to realize where the money for a minimum wage increase will come from: mostly from workers and customers. [source]

So, what’s the solution?  How do we help those who are struggling, the moms and dads who are working two or three jobs to feed their families?

We do it by returning to the roots this country was founded on … where everyone had the opportunity to rise, to explore, to discover, to create, to invent, to succeed.

Forbes’ contributing author Mike Patton writes this:

“A minimum wage job, after all, should never be the end game. Rather it should be a beginning step in the career path for those inclined to improve their circumstances. Unfortunately, we have a country filled with individuals who are satisfied with a welfare check, but who are fully capable of working and becoming a productive member of society. If government really wants to help our economy, it’ll focus on getting people off of entitlements and back to work.” [source]

As long as we are dependent on anyone or anything outside of ourselves to provide for our basic needs, we are nothing more than caged animals in a zoo where we wait for the next feeding,  spending the day hanging out with all the other caged animals thinking “this is all there is to life.”

Every person has the potential to rise above their circumstances and change the direction of their life.

Every single person, no matter where they have come from, where they are right now. The opportunities for learning and gaining skills are available.

Nowhere is this more prevalent than in the internet marketing industry or online marketing.

Anyone who desires to change their financial struggle can access endless opportunities to begin as an online marketer.  No college degree is required, no job uniform necessary … just the willingness to learn, the determination to take action, and the belief that you are worth so much more than what a boss or the government says you are.

I have met many online marketers who dragged themselves out of the pits of hell to rise to a level of income that surpasses the income of many CEOs.

Is it easy to do this?  Hell, no!  It takes work, it takes focus, it takes determination.  But they did it – starting from ground zero and building their own economy, step by step.

But, it sure beats living like a caged lion waiting for someone to toss the next meal to him.

It’s when ordinary people rise above the expectations and seize the opportunity that milestones truly are reached. –Mike Huckabee

America still is the land of opportunity.  Heros arise every single day.  Success is achieved, wealth is created, families are pulled from the pits of poverty to a lifestyle of freedom through the wonder and capability of internet marketing.

Raising minimum wage does not cure the problem, it only increases the mindset of entitlement.

It’s time to rise up and claim your entitlement to build your own economy and provide for your family, as our ancestors did.

What’s your take on raising minimum wage?

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Trisha Barnes
Proud member of Simple Freedom

P.S.  What’s Simple Freedom? A group of people, a culture of CAN-DO – who are helping people rise up and begin to generate their own income online.  We are part of Simple Freedom.

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To give people everywhere a real shot at success in their own personal online business. To give them the best customer support ever. To treat them special in every way and to massively over deliver value. And to give them, finally, a simple, fun way to create cash flow online.

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7 thoughts on “The Real Cost of Raising Minimum Wage

  1. I remember getting my first job many years ago when minimum wage was only $2.35/hour. Only students and part-time workers made minimum wage back then. By the time my daughter was in high school, she got $10/hour making sub sandwiches because nobody would work for less than that. A 16 year old girl does not need to make an extra $200 or more a week other than to save for college. Students NEED to learn work ethics and skills to begin their careers to be productive citizens in their future. Because of the “living minimum wage”, many employers will opt to hire a fewer number of older employees instead of students that will be moving on to other jobs or school. Unfortunately, raising the minimum wage will keep many more of our students out of the work place because of the fewer jobs that will be available. Too bad there are not more options for employers than a straight “minimum wage”.

    1. I agree Jan … it’s really become a mess with no one really winning at any age. I’ll stand by my belief that less gov’t, less entitlement – more work ethic instead. Thanks for stopping by the blog! 🙂

  2. Roland Leveille

    I’m a bit divided on this topic Trisha. I don’t see a problem of raising the minimum wage when the monies come from the greedy companies the people work for.

    But we all know that to make sure these companies get the margin of profits they look for, they’re not going to take any less for themselves, but instead like you said will raise the price of products and services.

    I think people deserve a higher wage. Most people cry foul when they see others earning better wages than themselves. They are jealous. So they want everyone to be poor like them, but nobody is going to win that way.

    Either companies have to sacrifice some profit or keep the wages lower but ALSO lower the cost of living.

    This topic puts a fire in my belly and it’s frustrating as hell because we all know damn well there are a ton of fat cats enjoying the high life, which is all fine a dandy, but how much is enough.

    It’s not fair when this greed is done at the cost of hard working people who want to provide for their families.

    And for those on welfare assistance, at least the ones that are able to work but choose not to…well that’s a topic for another day.

    Interesting topic Trisha 🙂

      1. Roland Leveille

        No likely not, but the big ones likely are, plus there is a ton of competition. It’s not about the people so much anymore I don’t think.

  3. Steven LeBlanc

    Minimum Wage is a huge cost of entry barrier for new and unskilled workers. It’s only “good” for the perpetual minimum wage worker.

    1. Steven, I agree – it was never designed as the end all point in a career, but unfortunately, many see it that way. Learning that nearly half of minimum wage earners are ages 16-24 made me see that even more clearly.

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