Raising the minimum wage from $3.35 to $5.05 sounds humanitarian and the proper course of action. However, the Congressional Budget Office assessed the impact of this on the economy and came up with these disturbing figures:
It would push up consumer prices proportionately (no free lunch).
It would result in the loss of 250,000 to 500,000 jobs. Employers may feel the type of worker who earns a minimum wage is worth only $3.35. If he demands $13.60 more a day, the small businessman or homeowner would prefer to do the job himself, employ someone more skilled who would be more accurate, capable, etc., or use machines.
It would raise inflation 2 to 3 percent per annum.
Those it would hurt the most would be the ones it ostensibly was to help. Higher prices for goods, inflation, fewer jobs. It`s an easy hit, a cheap win, and it needs rethinking.
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