In the State of Union Address on Tuesday, President Barack Obama revealed a master plan that will guide our country over the next 4 years and – hopefully – leave a lasting legacy. The to-do list includes the usual bullet-points of education, energy, & infrastructure while also adding a few controversial issues such as gun-control & immigration.
As an American listening to this “master plan,” one can’t help but be excited. Things are going to be amazing. Soldiers will return home from war. Energy will become cleaner. Innovation will continue. Gun violence will disappear. AND…
Everyone will make more money.
At least, that’s what it sounds like.
Because our President wants to raise the minimum wage from $7.25 to $9.00 by 2015.
Because we need to strengthen the middle class.
I know it seems like a pretty simple idea. If you pay someone more money, they have more money to spend. But even with the simplicity, I want to dive a bit deeper for all of the haters out there.
Let’s say a company has a payroll budget of $63/day.
They currently have 9 employees making $7. When the government increases the minimum wage from $7 to $9, each employee makes $2 more!
Who doesn’t like more money?
The 2 people that got fired…Because now the company can only pay 7 people $9.
An article in the American Economic Review reveals that 90% of Economists agreed that the minimum wage increases unemployment among low-skilled workers. (Kearl J.R.)
But, what do they know? I like our President and I know that he must have had some proof before making this proposal.
I’m still searching for the proof.
Until then, enjoy this (outdated) article on the issue.
To summarize (without sarcasm), I believe the minimum wage prices out less qualified workers and negatively affects small businesses. I find this ironic seeing that these are the 2 groups our President primarily wants to protect. What do you think?