Bill O’Reilly, on his January 29th broadcast, said that the GOP should “wise up” and raise the minimum wage to $10 an hour. He went on to say, “Come on. $10 bucks an hour? Babysitter’s get that.” His guest, Republican Kate Obenshain, looked aghast as he gave his spiel about the reasons why he thought the government should raise the minimum wage and then responded by saying that the free market should decide wages not the government. At one point she even called O’Reilly a “social engineer” for his views.
While it always seems commendable to want to raise the minimum wage – raising the minimum wage does little more than hurt the free market society that works very well on its own. If a company only has a certain number of dollars to put towards new employees and the government imposes a higher pay-scale on that company – one of two things will happen:
- The company will choose not to hire new workers and either increase, or fail to decrease, the unemployment rate.
- The company will hire new workers at the government imposed rate and increase the cost of goods and services to match the new wages which will put further strain on the American consumer.
Most companies will not take a hit to their profits just so the minimum wage employee can enjoy a better standard of living – businesses just don’t operate that way. Like it or not, most businesses operate to make a profit not as social welfare organizations.
Minimum wage jobs are minimum wage jobs for a reason. They require little skill and are not meant to be a lifelong career. If an employee is a hard worker and follows directions well, very rarely will they continue to earn minimum wage or stay at a minimum wage paying job. These employees don’t have to be intelligent or well-read, they just need to follow directions, work hard, and most companies will reward their workers for being good workers.
The best thing the President and Congress could do for minimum wage workers is to improve the economy. In a sluggish economy, more companies will offer low wages because their profits aren’t as high and because there are more people clamoring for the same job. It all comes back to supply and demand, the absolute first thing you learn in college economics. If supply is high, demand goes down therefore wages go down. If supply is low, demand goes up and so do wages.
My husband works in high-end construction in South Florida. The company where he works has both payroll employees and independent contractor crews. During the lowest part of the economic downturn, my husband’s independent contractors would beg him for a job and would work for lower wages because they knew demand was low and they also knew profits were low. However, as the housing market started to improve and demand started to increase these same independent contractors began to demand more money and refused to work until their wages were raised – sometimes to as much as twice the original rate. My husband had no choice but to pay what they asked because demand was high and supply was low.
If Bill O’Reilly lived in the real world and not in the liberal mecca that is New York, he would understand how the real world works. Yes, I can see how making less than $10 an hour in New York City, one of the most expensive cities in the world, might seem absurd (although, I highly doubt anyone actually works for less than that in NYC). I can also see how a millionaire who hasn’t been out in the real world job market in decades can be so out of touch. However, due to the fact that he holds a platform that reaches millions of Americans everyday maybe he should hold his tongue until he figures out how the real world works.