KE Cellars

Minimum wage: here we go again.

Minimum wage: here we go again.

Listen to the broadcast of You Tell Me on KTBB AM 600, Friday, February 15, 2013.

MP3 Download

Here we go again. In his State of the Union address President Obama put forth an entire list of things he wants Congress to approve, one of which is to raise the federal minimum wage to $9.00 per hour from its present $7.25. Said the president,

“Tonight, let’s declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty, and raise the federal minimum wage to $9.00 an hour. This single step would raise the incomes of millions of working families.”

Minimum wage is a Democrat favorite that adheres to the maxim that the more wrong an idea is, the more that Democrats will cling to it. An uncritical media will let stand the president’s assertion that raising the minimum wage “would raise the incomes of millions of working families,” when, in the aggregate, it will do just the opposite.

In support of his position the president said that since the federal minimum wage was last raised, “nineteen states have chosen to bump theirs even higher.”

What the president didn’t tell you, however, is that of the top 10 states with the lowest unemployment rates in the country, only one, Vermont, has a state minimum wage that is higher than the federal minimum wage. He also failed to tell you that according to the Bureau of Labor Statistics, of the top 10 metropolitan areas with the highest unemployment rates, nine of them are in California – a state with an $8.00 per hour minimum wage that will likely be raised if the federal minimum wage is raised.

It’s this simple. States that have no minimum wage law, or that set state minimum wage equal to the federal minimum wage, in the aggregate have lower unemployment rates than states with minimum wages higher than the federal minimum.

The whole idea of a minimum wage decreed by government is a bad one – for a long list of reasons. Here are just a few.

One. Politicians can set the minimum wage at whatever amount they choose. What they cannot do is legislate the money to pay that wage. Money to pay wages comes from the employer and if the employer doesn’t have it, or decides that the work is not worth it, workers get laid off and hiring stops.

Two. Most who earn minimum wage are young employees in entry level jobs. These workers have the least experience and thus the least to offer an employer. A young worker being paid minimum wage is, in effect, forfeiting cash compensation in return for the economic benefit of being afforded an opportunity to gain experience and skills that will one day command a higher rate of pay. Raising minimum wage deprives such workers of that opportunity.

Three. The Congress cannot simply decide what an hour’s worth of your time is worth to you or what an hour’s worth of your labor is worth to an employer. From the perspective of your potential employer it depends on how much he can charge for the work you do and from your perspective it depends on if someone else is willing to pay you more.

Decreeing that wiping down cars at the car wash is worth $9.00 per hour doesn’t make it so. The car wash owner may be obligated to pay the wage but the car owner is under no obligation to pay the resulting price for getting his car washed. At some price it’s worth it to wash the car oneself which means that at some wage level, it’s not worth it for the car wash owner to hire workers.

Four. If you have reached the age in life at which people ordinarily have children, buy houses and raise families and yet you command only minimum wage for your skills, experience and education, no law can help you. Your problem is that you’re not offering a prospective employer enough economic benefit to make it worth paying you a higher wage. Your problem is you and only you can fix you.

There. Four arguments against minimum wage. There are so many more.

The president’s proposal to raise the minimum wage isn’t policy. It’s pandering – something that a country drowning in debt with a sputtering economy can ill afford.


  1. Excellent points regarding Obama’s call for a $9.00 minimum wage. But no argument will stop liberals from imagining they can legislate prosperity. I recall discussing the minimum wage with my brother some years back. He wanted a $10 minimum wage, saying that it would end poverty. My brother was a fool. So, too, is anyone who imagines prosperity can be legislated via a minimum wage increase.

  2. Linda E. Montrose says:

    This is just another way of destroying this country. You destroy jobs, where else does the worker have to go? The government, which is what obama wants to do, have everyone dependant upon government assistance. This is a JOB KILLER. Besides which, along with your wage going up, so will food prices and the other cost of services to make up for the increase in your wage. So what was benefitted here? NOTHING but the loss of jobs and the increase in the cost of living!!!

  3. My wife, a small business owner herself, upon hearing that Obama wants a $9/hour minimum wage immediately stated that she will cancel plans to hire another employee that she certainly could use. Between hiring an additional employee, she would be expected to increase the pay rate on an existing experienced employee so as to keep her from crying “Fowl!” for having a new, inexperienced employee receiving the same pay. In addition, the FICA matching increases costs to the business, a business that is desperately fighting to be competitive in a world of consumers who are pinching pennies already, and where the government and local charities are opening competing locations within two blocks. My wife owns a daycare, and at the same time she’s hearing about an increase in the minimum wage, Obama also started talk about putting three and four-year-olds into public schools thus taking more clients away from her business. I call it his plan to expand public education in order to provide for more supporters–public educators. What a great bunch of voters we have these days. They were not educated enough to see the results of their vote. But they will soon…

  4. CARL SARTAIN says:

    I believe your statement that raising the minimum wage is a job killer is a fallacy, and here is why:
    1. I have been employed in positions where I have hired people for employment, and seen first hand that minimum wage gets you nothing but a substandard employee, if you even find someone who is willing to work for that rate of pay.
    2. Since 2008, I have been laid off 4 times since 2008, and have substantial experience in looking for a job. THE MAJORITY OF EMPLOYERS ARE ALREADY PAYING MORE THAN MINIMUM WAGE BECAUSE, AS PREVIOUSLY MENTIONED, THEY CANNOT RECRUIT SUITABLE CANDIDATES THAT CAN BE RETAINED IN THEIR WORK FORCE. In the local East Texas area, the vast majority of jobs are paying at least $10.00 per hour.
    3. While you espouse that raising the minimum wage “never works”, I would challenge you to try living on a wage of $9.00 per hour … or even $10.00 per hour. I have done my own research into the cost of living in my area of Longview, Texas, and what I found was that in order to maintain an ordinary existence, and by that I mean housing, food, utilities, car payments, insurance, etc. with no entertainment, a person would have to make $17.64 per hour just to meet the normal obligations we all must pay.

Leave a Reply