Minimum-wage boost will harm freedom and growth

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Recently the idea of increasing the minimum wage has come back to the attention of politicians and social manipulators in our media.

In many respects, proponents of this have good intentions. The theory is understandable that raising the minimum wage will help low-wage employees obtain better lifestyles, take pressure off social service agencies, create more dedicated employees and boost our economy. Having been in business for myself since 1975, I have seen firsthand that in the real world, all of those beliefs are dead wrong.

I don’t have any minimum-wage employees in my companies and never have. However, there are many companies that rely on the entry-level and youth employees who are most affected by the minimum wage. A 24-percent increase in the minimum wage, as proposed during the State of the Union address recently, would devastate businesses such as restaurants and retail stores where these wages are in use.

There is no room in the profit margins in those establishments to absorb the added cost of an increase in the minimum wage. Their only logical moves will be to either reduce the number of employees, raise prices to make up the difference or a combination of other business changes – none of which are good for either the consumer or the economy. There are many other costs associated with increased wages, such as employer matches within Social Security and Medicare – plus taxes under the State Unemployment Tax Act and the Federal Unemployment Tax Act, and other mandated employment costs.

What if the business owner has to cut benefits, reduce training budgets, buy lower-quality raw materials or outsource the work to other countries to reduce costs? How does this grow employment for our nation’s entry-level employees and the young people
who count on the minimum-wage jobs?

Increased minimum-wage requirements will have the exact opposite result than desired. States that mandate a higher minimum wage than is federally required usually have the highest unemployment. As a result, those businesses are compelled to exit those states. Those businesses that stay behind are burdened with higher taxes and increased social service demands. That is the reason for so many exoduses from states full of high taxes, do-gooders and extraordinarily intrusive government regulations.

Government intrusion such as increasing the minimum wage reduces freedom, slows economic growth, restricts employment opportunities, leads to inflation and slows the recovery to the detriment of all Americans.

(The writer is the owner of a local pest-control business.)

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Riverman1
93599
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Riverman1 02/24/13 - 07:21 am
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Now We Put Dollar Bills in Soda Machines

What Jeff Annis isn’t thinking about is although he doesn’t pay minimum wages to his employees he will feel the effects of supply and demand as other workers have a jump in salary. If he wants to stay a certain percentage ahead of the minimum wage with his workers, he, too, will have to raise their pay. Of course, this goes all the way up the line.

He describes well the negative effect on business and the increase in prices. When I first heard President Obama propose an increase in the minimum wage I thought of the effect on our economy in this time of trying to get a real recovery going. This is not the way. In my mind, I could see Augusta native Ben Bernanke twitching as Obama spoke. The poor are just as poor as they were when the minimum wage was 75 cents an hour and sodas were 25 cents.

RMSHEFF
18720
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RMSHEFF 02/24/13 - 07:59 am
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If raising the minimum wage

If raising the minimum wage worked, they would just raise it to $ 25 an hour and eliminate all social welfare. The federal government need to stay out of free markets or just go ahead and run everything. It looks like Obama would like to do the latter.

Radwaste
420
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Radwaste 02/24/13 - 08:24 am
6
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Make This Point:

When the minimum wage is mandated by the same government that prints money, it REALLY sets the value of the dollar for an hour of work.

IT CANNOT CHANGE THE HOUR OF WORK. RAISING THE MINIMUM WAGE DEVALUES THE DOLLAR IMMEDIATELY BY MAKING THE DOLLAR WORTH LESS FOR EACH HOUR.

Jon Lester
2480
Points
Jon Lester 02/24/13 - 08:32 am
2
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When has it hurt before?
Unpublished

Empirical evidence would suggest it hasn't. Check it out:

http://www.businessforafairminimumwage.org/news/00135/research-shows-min...

chascushman
6653
Points
chascushman 02/24/13 - 09:20 am
6
3
“When I first heard President
Unpublished

“When I first heard President Obama propose an increase in the minimum wage I thought of the effect on our economy in this time of trying to get a real recovery going. This is not the way.”
Riverman, this remains me of when FDR decided that the prices of farm products was too low so he had crops plowed up & animals killed in the effort of raising prices. All this when most people had no money and many were starving.
We were taught in school that FDR was a great president when in fact he put the “GREAT” in the depression.

ymnbde
10662
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ymnbde 02/24/13 - 09:12 am
6
4
the democrat's war on young black men

the government controls their education, and ensures they aren't educated well enough to get a good job. Now they're going to raise the lowest of wages beyond what untrained manual labor is worth, and young black men won't be able to work hard enough to get any job. The evidence is there, and commanding a verdict.

deestafford
31860
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deestafford 02/24/13 - 09:37 am
6
1
Politicians use the minimum wage to buy votes

when it should cost them votes if the low information voters would take the time and effort to learn.
The minimum wage is primarily an entry level wage and should not be the desire for someone to be at that level forever. They should develop skills and become more valuable to the employer.
It is not designed to be the income for a family bread winner. If someone is capable of making only the minimum wage they should not be raising a family they can't afford.
Since many union contract wages are tied to the minimum wage it behoves the unions to support increases in the minimum wage therefore buying union votes for politicians.
An employer must not match only the increase in the minimum wage but their social security payments will go up also. It's a simple mathematical rule that an employer cannot pay a worker more than that worker produces to the bottomline of the company.
The minimum wage has racial overtones in that too many blacks have low education and skills and as a result can only perform low level work in many cases. Increases in minimum wage result as increased unemployment for blacks. The minimum wage was started to keep the Southern blacks who moved north from working for lower wages and thereby displacing white workers there. As a result a floor was placed on what the employer could pay. Sources on this are Doctor Walter Williams and Doctor Thomas Sowell.
It harms the chances for teenagers to find work and learn discipline and the things that go along with having a job. An employer maybe able to pay a teenager $5 an hour to perform some work for the chance of gaining work experience but that same employer could not afford to pay the minimum wage level.
The studies sited above done by UC at Berkley are refuted by numerous other studies. Economists are like lawyers in that they can come up with positions to argue any side of an issue.

chascushman
6653
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chascushman 02/24/13 - 09:35 am
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“the democrat’s war on young
Unpublished

“the democrat’s war on young black men”
ymnbde, Well said. A book you might want to read is “Losing the Race” by John H. McWorther.
He is a black professor at U. of Cal. at Berkeley.

ultrarnr
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ultrarnr 02/24/13 - 10:57 am
0
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Why we should raise the minimum wage
Unpublished

There is absolutely no credible study showing that raising the minimum wage has a negative effect on employment. There are numerous studies from unbiased sources showing that raising the minimum wage has no discernible effect on employment. There are studies that show raising the minimum wage does have a small positive effect on GDP growth. Opposition to raising the minimum wage is just another attempt to keep workers on the lower rungs of the economic ladder marginalized, subservient and trapped. Raising the minimum wage is one small step at addressing income inequality and helping upward mobility.

deestafford
31860
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deestafford 02/24/13 - 11:06 am
2
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Bernanke is not from Augusta

He is from Dilion, SC

WritingsOnTheWall
118
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WritingsOnTheWall 02/24/13 - 11:39 am
2
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Why do we have the minimum
Unpublished

Why do we have the minimum wage? Why?!

Because the $0.75/hr that your company would love to pay you if they could get away with it would likely not pay the rent.

Prices have steadily gone up every year but the minimum wage has not kept up and that's why people are on welfare. It's funny how Congress can vote themselves a pay raise every few years but vote against raising the minimum wage for the tax payers who pay their salaries. What absolute gall. Keep 'em poor and powerless is their and most user's at the AC's agenda...

Since the beginning of the industrial revolution businesses have used every opportunity to take advantage of workers or the environment in order to increase profits. Every time someone suggests a law or regulation that protects either they are accused of being against capitalism, socialist or anti-American.

What's wrong with wanting a wage that actually allows you to live?

WritingsOnTheWall
118
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WritingsOnTheWall 02/24/13 - 11:41 am
1
5
Nobody thinks that they are
Unpublished

Nobody thinks that they are owed a job. However, when anybody, whether they flip burgers or design cathedrals, puts in a days work, they are adding to the growing revenue of the corporation for which they were hired.

If it is accepted that a man may capitalize his ideas and use the resources available to him in order to make a living, then it is logical that a man may capitalize his labor, because his labor is what he is selling, just as what is manufactured, be it burgers or steel, is what the corporation is selling.

Though there is a difference in skills between the person flipping burgers and the person building cathedrals, the principle is the same. Both people deserve a living wage. No one will argue that the cathedral builder should not earn more for his skills, but the builder would be incensed if he was offered .75 an hour. Likewise, the burger flipper deserves a decent wage which, while it may not be commensurate with the builder, at least is enough to say that their efforts do add to the bottom line of the company that hires him.

It's a matter of human respect.

slsoske
9
Points
slsoske 02/24/13 - 12:06 pm
1
7
Minimum

There is no significant indication (though studies not by the government) that show that raising the minimum wage affects unemployment or job growth. Quit listening to Fox News and the rhetoric of the Republicans and think for yourselves. And if you want to live on $7.25 an hour, what is stopping you?!?

WritingsOnTheWall
118
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WritingsOnTheWall 02/24/13 - 01:52 pm
1
6
Everyone is born into
Unpublished

Everyone is born into different sets of circumstances. Not everyone working retail/food service are there because they want to be or because they are too lazy to better themselves. They are there because maybe they did save up for college once upon time but maybe they or a parent got sick and that depleted the savings(most of America is uninsured and one bad illness away from poverty). Maybe someone got pregnant, didn't believe in abortion(lots of pro lifers here should be on board with this), and all of their available funds are now going to support a new child. It takes about 100k to raise just ONE child in today's world and that's only the bare minimum. Maybe a parent died and they've had to take on the roll of raising their younger siblings. Life is a beach and not all of us are lucky enough to be born into circumstances where secondary education and earning degrees is easily attainable.

WritingsOnTheWall
118
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WritingsOnTheWall 02/24/13 - 01:54 pm
1
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I do think some conservatives
Unpublished

I do think some conservatives have some valid concerns were this issue is concerned, but especially when the economy is what it is, there are a lot more people trying to support families on minimum wage jobs because the other jobs (even for those WITH higher education) have dried up. But even in a normal economy, I do believe that an individual should at least be able to provide for the minimum standard of care. And if it's not periodically increased, or if it's not tied to inflation, then every day that goes by our unskilled laborers (whose unskilled labor is vital to our economy) are less and less capable of taking care of themselves. So then they need public assistance. I'd rather McDonald's cover that cost than the tax payer. If it means that a Big Mac costs an extra nickle then so be it. Maybe if they knew that the mw increase was tied to inflation they'd be less likely to increase their prices too much.

chascushman
6653
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chascushman 02/24/13 - 02:22 pm
2
2
“Quit listening to Fox News
Unpublished

“Quit listening to Fox News and the rhetoric of the Republicans and think for yourselves.”
I guess the folks that listens to MSNBC and the democrats think for themselves, give me a break.
The reason the democrats wants to raise the minimum wage is because other than teenagers most of people making $7.25/hr are uneducated and vote for the democrats.

ymnbde
10662
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ymnbde 02/24/13 - 02:37 pm
6
1
please don't let yourselves be used by racists

McDonald's has machines already designed that can make burgers. They now cost just slightly more than hiring a real person. When that real person makes slightly more, the machines will be built and the person will lose his job. Every single minimum wage employer has a machine, or plans for China, that will replace a worker when the cost of their employment reaches a certain level.
The useful"low information voters" who keep posting about fox news people need to realize that young black males lose their jobs at a higher rate when the minimum wage goes up, and that isn't reflected in the overall statistics. Please don't let yourselves be used by racists.

Darby
29231
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Darby 02/24/13 - 03:06 pm
8
2
"When has it hurt before? Empirical evidence would suggest....

it hasn't"

.
"Empirical evidence" is a phrase, used as a crutch in order find an easy answer without regard for the evidence.

1 : originating in or based on observation or experience 2 : relying on experience or observation alone often without due regard for system and theory.

Obviously, anyone who subscribes to this belief does not and has not run a successful business. In practice, the minimum wage destroys jobs and denies work first to teenagers and to minorities. Yet, Democrats constantly fall back to this practice because it cost them nothing and buys them votes.

The minimum wage drives many small businesses out of the marketplace or prevents them from growing. Larger businesses accept the government mandate, but find ways to cope. Either by hiring fewer people, or passing the cost on to consumers or a combination of the two. Both scenarios are hurtful to the economy. In bad economic times possibly even destructive.

Darby
29231
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Darby 02/24/13 - 03:08 pm
5
1
Empirical evidence would suggest......

(1) That eating oatmeal for breakfast is deadly, given that everyone who has eaten oatmeal has or will die.

(2) That sticking your hand into an open flame is painful and dangerous.

In short, empirical evidence CAN BE RELIABLE but it may not be. It can be and often is nothing more than what you make of it!

People who invest their savings and lives into trying to make a business successful and profitable are the last to sign on to the concept of a government mandated minimum wage. THAT IS EMPIRICAL EVIDENCE you might just want to consider.

Riverman1
93599
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Riverman1 02/24/13 - 03:39 pm
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Bernanke Born in Augusta

DeeStafford said in response to my post, "Bernanke is not from Augusta. He is from Dilion, SC."

No big deal, but he grew up in Dillon. He was born in Augusta. Thus my comment he is a native of Augusta.

lovingthesouth72
1408
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lovingthesouth72 02/24/13 - 04:31 pm
4
1
burning from both ends

Mr Nobama is asking businesses to pay more in taxes and to increase their employee's pay. Can this prez not do the math? No wonder our country is in such dept. He really really does not get it.

Darby
29231
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Darby 02/24/13 - 05:16 pm
6
1
"If it means that a Big Mac costs an extra....

nickel then so be it."
.

Fortunately, for the American economy, it's not your call.. Else we might all be eating dog food.

Ever wonder why you're not running McDonalds or BK, or Wendy's?????

RMSHEFF
18720
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RMSHEFF 02/24/13 - 07:43 pm
1
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Its common sense

Its common sense however common sense is not so common any longer. We live in a day where the "low information" voter reigns supreme and Obama takes full advantage. The minimum wage was started by FDR in 1938 along with the 40 hour work week and mandatory overtime pay. These are one of the reasons for inflation over the last 70 years. If you were a fast food restaurant owner who paid new employees minimum wage and making a small profit and then were forced to give every employee a 2 dollar an hour raise you would only have a couple of choices. 1) Raise the price of your food which would result in fewer sales and layoffs. 2) Fire several employees to lower your payroll cost to cover the raises for the employees you kept. No matter which decision you made it would result in fewer jobs. I think Obama's real goal is to maximize the number of Americans who are dependent on the federal government while giving the impression of trying to help those who are at the bottom rung of society. All one need to remember is that all cost a business owner has, from rent, taxes, cost of materials, payroll and healthcare etc. must be passed on to the final consumer in the price of the goods or service. Any increase in minimum wage will be passed on to you and I and will result in inflation and fewer sales.

allhans
24865
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allhans 02/24/13 - 09:27 pm
2
2
Making promises such as

Making promises such as raising the minimum wage makes Obama look good to his subordinates. Never mind that it won't happen, he will blame the failure on Republicans while he preens, winks .....

KSL
143692
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KSL 02/24/13 - 10:07 pm
2
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allhans and sheff

For the life of me, I can not understand why so many people just can't understand those concepts.

chascushman
6653
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chascushman 02/26/13 - 08:49 am
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“For the life of me, I can
Unpublished

“For the life of me, I can not understand why so many people just can't understand those concepts.”
It is because the public schools have been dumbing down the kids for the last 30 yrs. and it is paying off for the democrats.

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