But it sounds so good when they talk about it
on September 18th, 2007 at 9:12 am(teachers-vs-union.blogspot.com) On Tuesday, July 24th, the first installment of the Fair Minimum Wage Act of 2007 went into effect. This law increased the federal minimum wage from $5.15 to $5.85 an hour and will continue to increase it over the next two years. This may look good at the first glance, but there are many hidden costs found in the minimum wage. Please allow me to explain myself.
A minimum wage law creates an artificial floor for businesses by limiting their resources. When faced with a raised minimum wage, businesses must make a hard choice. They must either raise the prices of their products and services or they must fire some of their employees in order to pay the wages of the rest of their employees.
If businesses, on the one hand, raise prices, people living on fixed incomes will be hurt. These people often depend on a Social Security or disability check every month. If businesses, on the other hand, choose to fire some of their employees instead, inexperienced and handicapped people will suffer most. Many jobs will be lost and some may even be outsourced to cheaper foreign labor. (more…)
