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Monday, December 04, 2006

Minimum Wage and it's benefits.

Minimum wage before the November election was a hot topic and some what still is. Politicians claim that by raising the minimum wage, it’s good for the people, good for local economic development and everyone around it. However, business owners argue that they would have to lay off workers because they can’t afford that extra cost. But is it really the reality?

In an article in the December 4th edition of the Washington Post talks about this issue. Nomey Druskin, manager of a hair designer shop pays her 6 workers $8 per hour, which is well above the above the minimum wage of $5.15. If I pay less, says Nomey, I won’t be able to keep happy and good help; and customers will see that.

Two other employers say the minimum wage is irrelevant to what they would do, and getting rid of employees is just out of the question. Mr. Wordsworth who owns a restaurant says that he would not lay off his workers if the minimum increases, but would not add additional ones either. Mr. Castro who owns a super market on the other hand, says that not only would he not lay off workers; he’d actually increase the pay to be above the new minimum.

So who benefits and who suffers if the minimum wage is increased? For the workers that make the minimum, they surely benefit. Will some employer suffer if they have to lay off good workers, thus decrease the production and quality? The answer is yes. But in the above three examples, it wasn’t the case. Will everyone benefit if the minimum wage is increased? The answer is definite NO. How can people that already have a decent wage benefit? The answer is they won’t. Will the economy benefit? Well, when workers are happy workers, they will work harder and efficiently, the economy sure benefits. But what about the employers that need to lay off highly efficient worker when they truly can’t afford them? All these clearly show that one can argue both side of the fence. There is no wrong answer.

But one group of people that is guaranteed to benefit is the politicians. When the wage is higher, it means they can tax higher. And when there is a higher tax, the fat politicians get to eat even more. And don’t we love that?

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