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Illegal Immigration.
Topic Started: Thursday Oct 16 2008, 05:06 PM (806 Views)
famicommander Tuesday Oct 21 2008, 06:05 PM Post #41
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Wipe that face off your head, bitch.
[ * * * * ]
 *facepalm*

When minimum wage is instituted, it means that business owners will have to pay more money. In order to avoid losing money, they'll raise their prices. Because the minimum wage is across the board, so too will be price increases. That means that more and more goods and services are beyond the price range of those making the minimum wage in the first place, thus negating the effects of having a higher paycheck. Having more money doesn't mean anything if said amount of money is worth less in the real world.

Furthermore, the minimum wage creates unemployment. A business owner might decide than an uneducated worker is worth X amount of money, so he hires that person. If the minimum wage is higher than X, then the person who does the work equivalent to X compensation either gets fired, doesn't get hired in the first place, or is a net drain on their company (decrease in productivity). Decreases in productivity lead to layoffs and price increases, compounding the issues of inflation and unemployment.

Higher unemployment leads to more reliance on social programs. Higher reliance on social programs leads to higher taxes. Said taxes will be levied on business owners. They will again raise their prices in order to compensate for the wages lost due to taxes. That means that people working minimum wage will have still less purchasing power.

If the working wage is negociated on a case-by-case basis, then the employer and the employee agree upon a price that works for both of them. This means that prices do not increase. Unemployment goes down because people unable to work at the level of productivity that the minimum wage requires will become employable. Lower unemployment leads to less reliance on social programs, which means lower taxes and this lower prices. If the employer won't pay a living wage, then no one will want to work for them. This means that they'll have no one to sell their goods, and they'll lose money. If the worker wants too much money, he won't get a job. That's called supply and demand, and it is the basis for all economics.
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