Back in February, the Alberta government announced that the province's minimum wage would be frozen. As I wrote at the time:
...The ostensible purpose of having, and then increasing, a minimum wage is to "help" those holding low-skill, entry level jobs.
In order to accept the premise that they are being "helped", one must look solely at wages: going from $8 to $10-an-hour, for example, would indeed appear to be an improvement.
However, if that increase has been forced upon your employer, and your employer's earnings are stagnant or worse, where is that increase going to come from?
It may mean that positions are cut, or that hours are reduced. It might mean that benefits are trimmed or training opportunities eliminated.
If you go from 40 hours a week at $8 an hour, to 30 hours at $10 an hour, simple math tells you that you've actually just received a pay cut. Factor in lost benefits and/or on-the-job training and it's hard to see how you've been "helped".
Of course, another way an employer would cover the cost of a mandated wage increase would be to simply raise prices. So now the employee working fewer hours (assuming he still has a job) and earning less now has to pay more for goods and services.
As the late Ronald Reagan so aptly put it, "The nine most terrifying words in the English language are, 'I'm from the government and I'm here to help.'"
The negative impact of minimum wage policy can be seen through the research on the subject.
As the Fraser Institute has pointed out, a major review by two economists of more than 100 studies from 20 countries found that the "overwhelming majority" consistently show decreases in employment stemming from minimum wage increases.
As we all know (or should know), it is the marketplace which determines the value of certain skills, and therefore the value of certain jobs.
Today, a government committee met to review the decision to freeze the minium wage. Not surprisingly, there were calls for the wage to increase:
...Public Interest Alberta wants the province to re-establish annual increases to the minimum wage. Other groups in attendance include the Catholic Archdiocese of Edmonton. They pointed out that the amount of people with jobs who use the food bank in Alberta is twice the national average.
As noted above, raising the minimum wage is not the answer, and may be just as likely to hurt those it's aimed at helping. The Center for Freedom and Prosperity has helpfully summed much of this up in this new video:
More here.
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