Minimum Wage Magic…

Someone much brighter than I must’ve stumbled across the magic solution to making hourly pay greater without having any impact on the product or the number of people working.  An Associated Press story today has this headline:  Pay to rise for millions; minimum wage will increase in 19 states.

Massachusetts and Washington will have the highest new minimum wage at $11 per hour.  A quotation in this AP report tells the story:  “This $1.50 increase, I cannot even comprehend or tell you how important this will be”, said the 51-year-old father of four who helped lead the fight for the increase in his state.  “The price of food has gone up.  Rent has gone up.  Everything has gone up…this will make a difference for so many people.”

And here I thought that everything was now wonderful following eight years of the Barack Obama presidency.  There seems a disconnect somewhere.  Am I uncaring?  No.  Do I understand that when the balloon is squeezed something has to give?  Yes.  A significant part of the problem is that minimum wage jobs were never intended to provide support for families.  These were the jobs you and I might have had when we were first starting out in life.  That was what the minimum wage was intended to provide for, a helping step onto the ladder…the steps up that ladder were left to each of us to negotiate.

Our national minimum wage is still set at $7.25 per hour and was last increased in 2009.  Congress obviously would like to be able to defy reality but apparently knows better.

As the minimum wage increases, the jobs affected will decrease.  Products will degrade and/or automation will increase or fast food restaurants will simply go away.  Will we get to the point of paying $12.00 for a Big Mac?  What if we want fries with that?

There is an obvious disconnect between these new levels of “minimum” wage and reality. This is something of an equivalent to passing a law that says gravity no longer exists, and then expecting that we can take strides of ten feet or more because we have become weightless.  That is possible on the moon but not here on earth.

We have an increasingly complex problem to resolve, and simply creating new levels of “minimum” income is not the solution.  We need to begin with an honest discussion of basic economics devoid of the bombast that politicians and attorneys can often provide.  We need to be honest with all the citizenry; there is no economic Santa Claus and gravity still exists.  Politicians who continue the charade are disingenuous at best and dishonest at worst.

This is one of those times when I am thankful for not having to participate in figuring out how this all gets resolved.  This can has been kicked down the street for so long now, there may not be an effective solution.  I doubt that we can raise the minimum wage to the point where it will provide support, or even half the support, for a family of four.  What do we do?  Do we simply let that family and all those like that family starve to death?  Do we gradually reintroduce the realities that exist?  Where will the politicians come from who are up to that task?  We need adults in the room, and there aren’t many of those that I can identify on the Democrat side of the aisle.

This is but another of those classic liberal vs. conservative debates.  This is another display of feelings versus facts.  Voters in Arizona, Maine, Colorado and Washington state approved increases for this year.  Seven other states are automatically raising the minimum wage based on indexing.  It is a cinch that the Obama years did nothing to ameliorate this issue.

The time has come for a real and earnest discussion by and between all political factions and there is an absolute requirement for honesty without the usual political puffery.  Reality must be explained over and over until it is absorbed.  Politicians need to be absolutely honest in their interactions with their electorate.  It may cost them some votes, but it has to be done.

Too much to ask?  I fear that we may be so far down this road there may not be enough adults left in the halls of Congress to progress toward a workable solution.  This is not sustainable.  I believe we may have already passed the point where a viable economic solution might be found.  There is going to be pain associated with whatever the solution is determined to be.  That simply is unavoidable.

We, collectively, need to work to resolve this problem before it gets to the point of being irresolvable.  Maybe it is already at that point but we must put forth the effort anyway. This simply is unsustainable at its current pace.

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