Feds Raising Minimum Wage
(2 votes, average: 4.50 out of 5)
Loading ...According to the U.S. Department of Labor, the federal minimum wage will increase later this month as unemployment rises. Minimum wage will go to a minimum floor of $7.25 an hour starting July 24 from its current position of $6.55.
The ripple will be felt in 29 states and many will follow suit to surpass the new wage level. Several states already mandate the $7.25 minimum wage while others exceed the amount. Employers are required to pay whichever is the highest: federal or state.
With unemployment increasing daily, how will businesses absorb this added cost? As history has told us, businesses that are trying to preserve their profit margin will do everything they can NOT to absorb this cost. How? By simply raising prices. By passing the cost on to the consumer, an adverse effect of minimum wage occurs: people buy less. Sometimes businesses move out of state (or out of the country) to find cheaper labor. Or, businesses absorb the cost and attempt to cut where they can–in most cases–labor. In any case, all options are counter-productive to boosting the economy. A pretty simple concept to an entrepreneur but one that continuously seems to fall on deaf ears to democratic leaders and even some republican leaders today.
With unemployment at an all-time high of nearly 10% nationwide, how can businesses justify raising prices when consumers do not have the money to spend? It is interesting to note that most states that plan to raise their minimum wage above the madated wage limit (or already have this year) are led by democratic governors and also have the highest unemployment rates. Take Michigan for example. Michigan is leading the unfortunate race down the toilet with a plan to raise minimum wage above the federally required limit and a growing 14.1% unemployment rate to boot. Oregon is next in line with a 12.4 percent unemployment rate, led by democratic governor Ted Kulongoski. Ohio, D.C. and Illinios are also up there with 10.8%, 10.7% and 10.1% unemployment rates respectively. Coincidence? We at Sick of Liberals think not.
