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The Madera Tribune

The dilemma of the minimum wage

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webmaster | 02/26/13

President Obama wants to raise the federal minimum wage to $9 an hour because he feels it will help the economy. If he is right that raising the minimum wage will provide the tide that raises all the economy’s boats, then why not go for broke and raise it to $20 an hour?

Well, we all know that wouldn’t work. The United States priced itself out of the world wage market decades ago. That’s why manufacturing jobs left. Depending on how it is calculated, the average world wage is quite a bit lower than the U.S. minimum wage of $7.25 an hour. According to information provided by the Central Intelligence Agency Fact Book, the average worldwide minimum wage was $5.46 per hour five years ago by one calculation, and $4.39 by another.

It could be even less. Seven years ago, the Boston Globe determined the average world wage was $3.66 an hour. At that time, countries where people earned the average world wage included Mexico, Chile and Latvia. That wasn’t too bad, though, considering that half the people in the world — that’s half — made a whopping 81 cents an hour.

And you wonder why people will risk everything to come to the United States, where they can make an astonishing $7.25 an hour. If we raise that wage to $9 an hour, people will stampede to come here.

Another problem with raising the minimum wage is that it tends to push other wages up, as well. People who make more than the minimum wage believe their own wages should increase by at least as much as the minimum wage increased.

You can’t blame people for wanting to make more money per hour. But what will happen to them if their hours get cut back by their employers, who may not have any other way of coming up with the money to meet that new wage mandate?


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