I don’t think the federal minimum wage should be raised. In fact, I don’t actually think a federal minimum wage should exist at all.
Bear with me here and I will explain why. I believe in a completely free-market economic system—a system in which the government plays no role.
We’ve pretty much all taken basic economy classes which, at its core, boils down to supply and demand. The market will allocate scarce resources by itself, at which point the market will clear and both suppliers and consumers will maximize their wealth.
This is basic high school economics. So why isn’t this the system we employ in real life?
As an extension of this belief in the free market, I also think that if someone is willing to work for $2 and somebody wants to pay them $2 for their work, why is it the government’s place to interfere?
If minimum wage is raised to a certain point, the market will be stifled and the people in need of those jobs—the minimum-wage workers—will be worse off than when they started.
Furthermore, if an employer has the option to invest that money into a cheaper long-term solution, such as automated or robotic operation, why the hell would they keep flushing money into a system that demands they overpay workers in positions that historically have a high turnover rate and require little to no skill?
Another key argument against minimum wage is the variable cost of living (COL) across the country. Yeah, raising the minimum worked in Seattle because it has one of the highest COL indexes in the country. Seattle is roughly 45 percent above the US average, according to a 2016 report by the US Census Bureau.
In comparison, McAllen, Texas, is one of the cheapest places in the country to live with a COL of about 24 percent below the US average.
It’s easy to sit behind a keyboard and pass judgement but when it comes down to it, enforcing a $15 federal minimum wage would devastate the economy in numerous communities and inflate the COL beyond reason.
The workforce is so variable, with the factors of supply of labor, the demand for labor, skills, experience and COL. They all differ so much place to place. There is no economic reason whatsoever to try and price-fix wages across the country.
Click here for last week’s Chat with the Chief focused on how terrible driving through campus has become as a result of recent construction on the North side.