Raising minimum wage will damage the economy

By Gil Milanes

Increasing minimum wage sounds appealing to most people earning low wages, but it actually harms more than it helps.

There is no point of increasing minimum wage when everything will go up. The illusion of earning more money is facetious.

Most people agree that minimum wage should be raised.

The idea of earning more money and having extra money on the side sounds very fascinating.

What people fail to think about are the consequences that increasing minimum wage brings. Companies are forced to raise the prices of their products landlords put up rent, gas prices go up, goods cost more, everything goes up and the poor continue to be poor.

The rich continue to be rich. Some companies lay off workers, and double the work for employees, while other companies opt to replace workers with machinery.

Increasing the minimum wage too much can even be dangerous.

In a study title Effects of the Minimum Wage on Employment Dynamics by Jonathan Meer and Jeremy West, they concluded that “minimum wage increase of ten percent reduces job growth in the state by around 0.5 percentage points… a ten percent increase to the minimum wage results in a reduction of approximately one quarter of the net job growth rate.”

Robots in the long run are cheaper and employers don’t have to provide breaks, vacation, medical insurance, pay overtime or provide any benefits.

We live in a world where technology is taking over labor work and it’s matter of time before robots leaves many of us unemployed.

During elections politicians use minimum wage as a tactic to gain votes. If politicians really cared about voters, they would create laws or policies that prevent companies from increasing prices on products or at least balance the economy somehow.

At the end of the day most politicians are in it for the money they gain from donors during office and not to serve the American people.

Even those politicians with good intentions end up hurting the working class because they don’t think of the effects of increasing minimum wage.

Increasing the minimum wage also affects those employees earning a little more than the minimum wage.

When lawmakers force an increase in the minimum wage, companies have no option but to comply with the laws. Companies do have the option to keep everyone else earning above the minimum wage at the same pay rate.

In that case, the company’s ends up saving money because most likely they will increase prices on the product to compensate the increase on the minimum wage but those employees who were earning more will now have less money incoming.

In any way, shape or form is this article meant to sound like I’m against minimum wage.

I do believe that before we support an increase in minimum wage, we should do our research and take in account all the disadvantages the increase will bring to our lives.

Minimum wage should give people enough to get by in life. Surpassing the limit disrupts the economy and it makes it more competitive for people to maintain jobs.

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  1. I have a Bachelors in Economics and going for my MBA, with a minor in economics and I am currently working on a book project using my skills to profit off the investment I am going to make. Yet Gil Milanes’ opinion is an opinion and sadly, his lack of knowledge on ROI (Return on Investment) shows he lacks the economic skills needed to write an informed piece.

    Allow me to begin by writing, the author he cites: Jonathan Meer and Jeremy West are members of the small government, neo-conservartive group the Cato Institute (https://www.cato.org/publications/research-briefs-economic-policy/effects-minimum-wage-employment-dynamics). According to the New Yorker, the Cato institute was the brain-child of libertarian right winger Charles Koch (http://www.newyorker.com/news/news-desk/the-kochs-vs-cato). The organization’s philosophy, “Promoting an American public policy based on individual liberty, limited government, free markets and peaceful international relations.” goes counter to what East Los Angeles College is.

    According to the Cato Institute on college tuition is, “The solution to these problems — our spiraling costs, just about everyone else’s moribund systems — is not more government money, but less. It is to phase out aid and have people pay with their own funds, or money they get voluntarily from others. Then institutions would be unable to raise their prices with impunity, students would demand fewer expensive frills, while the system would retain the freedom essential to innovate and respond to ever-changing student needs.” (https://www.cato.org/publications/commentary/debt-free-college-maybe) so that no tax funds should pay for colleges. The reduced tuition rate, including the BOGG (Board of Governor’s Grant) should be eliminated. Cal Grant, Pell, as well as low-interest loans should be eliminated.

    The newspaper you are writing for should not be free to the students and there should be more ads than stories. Going back to your opinion and your quote, “Most people agree that minimum wage should be raised. The idea of earning more money and having extra money on the side sounds very fascinating. What people fail to think about are the consequences that increasing minimum wage brings. Companies are forced to raise the prices of their products landlords put up rent, gas prices go up, goods cost more, everything goes up and the poor continue to be poor.”

    Is patently false.

    How you ask? The 1956 top federal tax rate on regular income was 91% while the rate on capital gains was 25%. (federal-tax-rates.insidegov.com/l/41/1956) and minimum wage back in 1956 was $1 ($9.01). The average yearly income was $3,532.36 or ($31,821.82) and The average price of a home in the U.S. was $22,000

    Gas was selling for 23 cents a gallon ($2.07)
    A loaf of bread would set you back 18 cents
    A first class postage stamp was 3 cents
    Chuck pot roast sold for 33 cents a pound
    Coffee was 69 cents a pound
    The price of a six pack of beer was $1.20

    In other words, the amount you made paid for all this and college was free. Oh the average tax rate for the middle class was close to 10 percent. People had money to spend , thus, creating competition. So the more money people had, the more money they spend. Here is an economic scenario:

    LACCD’s construction cost us $6 billion which will take 30 years to pay off. That’s sounds harrowing but, every citizen, documented or not will pay for this. So how much will it cost Los Angeles County? The population of 10.02 million will cost us $19.96 a year. What will we get in return our ROI? A well-educated populace. According to the U.S. Census, more than 70 percent of the students who attend ELAC will remain in close proximity to and help pay for the colleges.

    On the other hand, when we go to war, recently like Syria, Trump ordered the attack on Syria and Afghanistan. What is the ROI after one bomb is dropped, one missile is lanched, one bullet is shot? Nothing. You can’t create something when an ordinance is destroyed. Yet raise minimum wage to $15, customer buys a loaf of bread, the store is short one loaf of bread, so they go to Weber Bread and order a loaf of bread and restock the shelf. Since Weber’s warehouse is short one bread, the warehouse orders a loaf of bread by contacting their supplier who make the bread from wheat and other ingredients, and restock their shelves, but then the supplier is out one loaf, so they contact their farmer, who grow the wheat and ship it to their supplier. This is called Supply Chain Management (SCM).

    What started from a raise of $15, led to the SCM and from the store to the farmer getting paid. The sole purpose for the raise is not to hoard the money but to spend and strengthen the economy. The role of government is to make sure that there is an even playing field and our economy gets stronger. Currently California minimum wage is $10.50 an hour and it’s safe to assume that you are not broke and starving, correct? As for automation: “Robots in the long run are cheaper and employers don’t have to provide breaks, vacation, medical insurance, pay overtime or provide any benefits.” that’s why there are unions. That’s why there are lobbying and contacting your State Senate and Assembly as well as your U.S. senators and Congressperson, telling them you do not want automation. Do you think it would work? 1 million women marching scared Congress and the only way Congress is passing things are through executive order…oh and the Affordable Care Act AKA Obamacare is still around…until California goes single payer. Oh and my final thoughts on automation? Unions help. How? Jean Stapleton is not a robot.

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