Mimimum wage won’t pay off


Does the minimum wage help or hurt people? There is a lot of conjecture about this. Some say it doesn’t impact inflation and helps provide a living wage for workers. But how can that be true?

The math is not difficult. Income equals Revenue less Expense (I = R – E). Basically, what you get is the result of how much people pay for your product less what it costs you to provide your product.

This is true in all situations. If you are employed, what you are paid less what it costs you to dress, eat, drive, etc. to do your job, is your income. For a burger joint, what people pay for the burger less what the owner pays for the meat, buns, building, waitress, cook, cleaning staff, etc. is their income.

So we put in place a minimum wage. This arbitrary amount has nothing to do with how much you charge for your product. So it simply causes “E” to increase with no adjustment to “R.” End result, “I” is less.

So what is the choice for the owner? Accept less income? Good luck with that. No it’s either reduce expense or raise revenue. Basically, staff reduction, cut serving size, pay less for inferior inventory or raise prices; typically a combination thereof.

The reason people get fooled into believing they are better off when the minimum wage is raised is that the revenue adjustment to return to previous income levels ripples through the markets. Minimum wage changes hit all at once, on a single day but the adjustment for revenue is spread out over months and doesn’t hit one particular product at a particular time.

This “stealth inflation” destroys our economy and leaves people worse off than if no minimum wage existed. Why? Think about it. You own the burger joint. You have to raise the price, reprint your menus. This had to occur sometime but you do it now and don’t want to do it too soon in the future. So the change is more than just to make revenue the same. That’s inflation baby!

So all those people in Seattle and in liberal government bodies throughout our state and nation act like a bunch of Little Jack Horners holding a victory plumb on their raised thumb, high for all to see and admire. But what they don’t show is the pie they destroyed in process of creating their photo op and the lives they hurt as Grandma’s Pies closes due to vandalized merchandise.

We need to use our brains and our hearts. We need to take actions that truly improve situations. Stupidity such as shown by the Seattle City Council needs to be derided and exposed for the charlatanism it is. Proponents of minimum wage ruin opportunity and destroy the economy.

Rich Rowley

Sweet Home