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Raising the Minimum Wage: Not the Answer

Posted by Larry Doyle on February 19, 2014 9:57 AM |

Raising the minimum wage is another hot button issue that will serve to incite strong reactions on both ends of the political spectrum, but fails to address core structural issues in our nation.

Who is not supportive of helping people rise out of poverty and try to earn a reasonable wage?

While some political pundits might like to rewrite basic economic principles, ultimately a raising of the minimum wage serves to re-slice our nation’s economic pie rather than grow it. Some individuals will benefit by earning more, but others in the same economic strata will suffer by losing their jobs altogether.

To think that there will not be a loss of jobs when the price of labor goes up is akin to defying some basic rules of science.

Net net, I would maintain that a raising of the minimum wage falls into the realm of not being a meaningful positive or negative for our overall economic well-being but merely another form of redistribution economics practiced by the current administration.

Who is more served by raising the minimum wage? Those engaged in political expediency looking to score political points. Regrettably, all too much of our time and focus these days revolve around this lowest of common denominators.

So let’s dispense with the minimum wage band-aid and put forth some hard-hitting proposals that, in my opinion, would help grow our economic pie. Who might have to give some ground in doing so? Those engaged in feeding at the Washington trough for personal benefit while failing to advance our national interests.

With little regard for the takers in the crowd, in lieu of merely pushing paper (as the raising of the minimum wage is likely to do), I propose the following as vehicles for helping people advance:

1. Increase educational choice via supporting well-run charter schools and student vouchers. Education is ultimately the only real path out of poverty. Tell the teachers’ unions to fall in line.

2. Public work over welfare. People should not want to remain on a form of public welfare because it is the economic feasible thing to do. There comes a sense of self-respect connected to work. This should be promoted. Getting another job is always easier when one has a job in the first place.

3. I firmly believe the two parent family is the best ‘social program’ in the history of our nation. Provide tax incentives that support marriage.

4. Let’s not overlook the fact that corporate cronyism serves the interests of the few at the expense of the masses. To that end, let’s engage in the following: meaningful tax reform including an increase in the tax rate connected to carried interest; a closing of loopholes that promote the hoarding of cash in offshore accounts; an end to the political payoffs that allow many corporations (if not industries) to abuse the public interest while paying little meaningful tax in the first place.

What are the needed ingredients to undertake these initiatives?

Leadership and love of nation.

Whatever happened to those virtues?

I can hear the cynics in the crowd say that these initiatives could never happen. I would ask who was the last political leader we had that put forth all of these topics on one political agenda and was willing to go to the mat in doing so? I know of nobody. Why? Because the party leaders dominate and they serve at the behest of those milking the system — not those who really want to serve our collective national interest.

Do you disagree?

Larry Doyle

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The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

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