July 24th is around the corner, and on that date, 29 states will increase their minimum wage requirements to 7.25 an hour. While some people will be cheering the move as a step in the right direction which helps out the lower income class, I think its a move with bad implications.
When minimum wage is increased, it creates a very short term benefit with long term problems. Lets take Wal-Mart for example, most the employees are minimum wage earners, and would benefit from the increase. However the company faced with increasing cost of labour now has to increase the selling price of their products to maintain the same level of profitability as before. And who will get hurt the most when prices at the discount stores go up? the same people who just a week or so before got their "raises" which are now negated. Ad to that the fact that other people who shop at those stores are now faced with higher prices as well, and the minimum wage increase ends up being a bad thing. ( I am not even going to mention that raising employment wages during a recession will have its own negative results as well.)
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