By Tyler Colford
A government mandated minimum wage sounds nice; I mean doesn’t everyone deserve to make a livable wage off of 40 hours, or less, of work a week? Let’s unpack what happens when a government enforces a minimum wage.
A minimum wage does not mean that workers will receive a livable wage. It means that, at a particular time, the (local, state, or federal) government, in a particular area, thinks that workers should be paid a set minimum wage. That set wage might or might not be a livable wage depending on where and when the mandated wage is actively enforced.
The dollar’s buying power can strengthen or depreciate in value; but knowing where and when, in a market, is hard to predict. There are also different economies from city to city; what is a livable wage in NYC is vastly different from Albany, NY… or rather what a livable wage is in Burlington, VT is higher than in Wilmington, VT; and when comparing NYC to Burlington their economies and livable wages are drastically different as well. These differences makes it hard to predict and enforce a “livable” wage state wide, let alone a mandated minimum wage for the whole country.
Even without the problems with different economies and the difficulties at predicting the economic strength of a country in the future; employer’s business habits will also change to accommodate for the minimum wage. Being forced to pay more at a starting wage, they will likely; hire fewer employees and have each employee do more; hire skilled employees over unskilled employees; or invest in machines that can cut the costs of production.
So ultimately what minimum wage could be implemented? Time and the economic state will make a previous minimum wage inadequate for the worker or unaffordable for the employer.
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