The minimum-wage myth
Progressives never fail to get their causation backwards. Labor unions and union advocates staged protests Thursday, demanding an increase in wages to $15 per hour. President Obama has stated that he would support an increase in the federal minimum wage to $10.10 per hour, while Sen. Harry Reid has promised a vote on increasing the federal minimum wage by the end of this year.
Does increasing the minimum wage really boost our standard of living? If I asked people what the results of a rise in the price of automobiles or gasoline would be, I am almost certain everyone would tell me fewer automobiles and less gasoline would be sold. An increase in the price of labor means individuals will demand less of it.
Progressives seem to think that the price of labor does not affect the price of goods and services. If the price of labor is increased by law, businesses will either raise the prices of their products to offset the increased labor costs, or they will adjust their production process. If businesses raise their prices, workers will notice that their pay increase had no effect and become trapped in an infinite cycle of demanding higher and higher wage increases with no real increase in value. If businesses adjust their production process, they may begin to move their companies overseas where labor is cheaper or substitute automated production in place of physical labor.
Fast food industries were never meant to be a place where you built a career. They were meant to give young, inexperienced workers an opportunity to build their skills for higher-skilled future employment or education. However, this incentive was eroded long ago when labor unions began demanding federal minimum wages in the first place, effectively knocking young, unskilled laborers out of the market.