This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Lower The Minimum Wage: Opinion

NEW YORK ( TheStreet) -- A minimum wage does more harm than good, and yet, we continue to hear from well-intended people that we should raise the minimum wage.

The latest call was in the Wall Street Journal, which had an opinion piece, "Time to Upgrade America's Miserly Minimum Wage" by Ralph Nader.

Proponents like Nader always start out their argument the same way: Divert the issue and pull at emotional strings by taking your attention away from the real issue. They choose a highly skilled and complete outlier in pay scale and crucify their hard work and the success that comes from it.

In the process, they essentially say the shareholders and board are too stupid to pay the CEO of their company the right amount of wages and they are overpaying. It's arrogant for Nader to suggest he knows better than the people who actually have their money on the line.

The first error I find with Nader's opinion piece is the statement, "President Obama finally broke his four-year silence on this issue by calling for a minimum-wage increase in this year's State of the Union address". That's not entirely true, but Nader can be forgiven for not knowing about Obama's delaying of American Samoa's minimum wage increases.


The Fair Minimum Wage Act of 2007 was to increase the minimum wage of American Samoa's workers 50 cents per year until the minimum wage was equal to the rest of United States.

As a result, some American Samoa's workers received an increase in 2009; however, shortly after, workers were laid off and unemployment increased to around 20%.

After realizing the impact of the minimum-wage increase, Obama then signed a wage increase delay until 2015. That also happens to be after Obama leaves office.

The U.S. Government Accountability Office reviewed the results of raising the minimum wage and found employment decreased as a result. For anyone who understands economics, this should not come as a surprise.

The impact on American Samoa workers may not match the thesis of raising the minimum wage effectively, but it does fit in reality well. Sadly, reality doesn't curb the desire for proponents to provide all sorts half-cocked reasons to push forward.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $132.54 0.00%
FB $80.54 0.00%
GOOG $540.11 0.00%
TSLA $247.73 0.00%
YHOO $43.48 0.00%

Markets

DOW 18,232.02 -53.72 -0.29%
S&P 500 2,126.06 -4.76 -0.22%
NASDAQ 5,089.3620 -1.4320 -0.03%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs