ResearchGoddess

…because you may not understand the ripple effect it will have on others around you! Dave, thanks for your posting on this topic. Ever since it passed here in Ohio, I’ve been waiting to see the fallout from this short-sighted decision. Check out the original article that Dave linked to here.

What lots of people may not realize is that in raising the minimum wage, you’re actually jeopardizing the employment status of those to whom the new min wage will go. I am not claiming to be an expert at this by any means, but any intelligent person can follow trends. Check this out:

Cincinnati has a lot of industrial manufacturing companies. For those who are unfamiliar with AK Steel, they have had a lock-out of their union workers since February of last year. I don’t know the specifics of the contract terms, but one of the inclusions was an increase in wage. Now, making more money is something we’d all like to do. Anyone who says otherwise is a big fat liar. But think about this: just simply increasing minimum wages is going to have a tremendous effect on every aspect of that business, including its workers and customers, not to mention the community impact which is already being felt.

Increasing minimum wage will drive up the cost of production. This in turn will force the company (which exists to make a profit and NOT to take care of its employees (YOU), regardless of what you may think!!!) to increase the cost of its product in order to cover overhead costs while maintaining profitability. This would probably occur regardless of marketplace demand. With the delicate balance of supply/demand tipped due to the increased cost of production, demand will most likely go down. Guess what happens next? Not as much product is needed and bought in the marketplace, which in turn causes LESS product to be produced by the company, which ultimately leads to decreased need of manpower and reduction of the workforce. Less raises, less hires, more layoffs, and guess what? More expensive products. This virtually cancels out the nickels and dimes that came from raising the minimum wage, because the people can no longer afford the products, or perhaps don’t even have an income now due to layoffs.

Look, I’m not writing this to offer up a solution. What’s done is done; the “people” have spoken. And I won’t even pretend to be some political or economic expert because I’m far from it. All I can do is offer up my personal thoughts on this issue. I personally do not work for minimum wage, though I did when I first entered the workforce. I can’t put myself in the place of someone today who is trying to support a family on minimum wage. But please, think about what you want before you ask for it. The long term implications might far outweigh the short-term fix.

Folks, there is no such thing as a free lunch. Somewhere along the way, someone’s got to foot the bill for everything. And you know who that someone is going to be in this case?

YOU.

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