Let’s look at the government mandated minimum wage, for in my humble opinion it’s one of the fundamental underlying issues that brought about many if not most of the economic problems we face today. A government manipulated and forced increase in the Minimum Wage ALWAYS negatively effects the very people it intends to help by slowing growth and creating inflation (it has to be paid for somehow).
As typically happens other wages must increase as well in order to keep up the “fairness” aspects of the wage increase, otherwise people are experiencing a cut in wages if thier hourly rate doesn’t increase in proportion to the minimum wage increase, which in turn slows growth across the board. And in the end, after a few years of leveling, everybody is in actuality back to right were they started from. Only the numbers sound bigger.
Costs will have risen along with wages, negating any real increase in the standard of anybodies living. Poor people remain poor, BUT those on fixed incomes, such as retirees, pensioners, those on disability, and Social Security recipients never get the same percentage of increase, which means they lose income by comparison. A rise in the minimum wage causes the value of their ‘check’ to decrease. That’s right, every time the minimum wage rises our old folks take a hit.
Somehow, when the system is subject to manipulation instead of the actual market forces of supply and demand, prices always outstrip income growth, making products cost more and more as the years go by. It’s caused the prices of product to increase in percentage when compared to income, possibly to pay for the periphery costs associated with just making a living today. That’s a hit right there, too.
Like was said, the minimum wage increased 40%, causing an across the board cost of living rise in comparison, but you can damn well be assured that the COLA’s (Cost Of Living Adjustments) for those on fixed incomes didn’t rise anywhere near 40%… Answer this: What was the percentage of S.S. COLA since 2006 or 08? That right there will tell the tale.
As a friend out there in the blogosphere said, “Why can’t the rest of the country see this?”
We wonder why people can’t pay their mortgages and the housing market collapsed… Answer: Government
It’s inherent in government to create a need for more government. If government actually ever fixed problems you have less need for government. Not gonna happen. Bureaucrats will never allow that.