February 19, 2014

Minimum Wage is for suckers.

Lets say that Company A allocates 50% of its operating budget to labour. (I'm just picking a number.) It's not 55% one day and 44% the next day.  It's 50%.  It's budgeted. The company is locked into that percentage for viability.

Suddenly Obama comes along raising the cost of labour arbitrarily.

If a guy has 10 people making 50% of his budget, and the budget is arbitrarily raised, he's not changing income. He's not gonna raise what he's paying labour.  He can't and stay in business.

So somebody has to get fired with this arbitrary raise thrown in.  It's just the way it works, because businesses do not change their labour costs day to day, hour to hour, month to month.  They budget these things as much as they can in advance 'cause it's the highest cost of doing business, usually.

So when the CBO comes along and tells people.  Okay, minimum wage raising will cost jobs and hurt the poor, you should listen. Because, it makes sense to anyone who understands how business works.

Further when CBO Director Doug Elmendorf comes to defend the findings against politicians who are trying to lure voters in, Pay attention!

Personally I am not against a minimum wage per say, as I know there are those who prey upon the desperate. I do not think a minimum wage should be a living wage or any such nonsense.  Let the states figure out a minimum wage (being zero if they want) and then let the markets work.

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