Minimum Wage: The Faux Pay Raise

This Philadelphia Daily News editorial represents the general economic ignorance among people who think government can artificially increase the cost of labor without any negatives consequences.

The reality is that if Harrisburg jacks up the cost of entry level jobs by nearly 40%, there will only be three ways job providers can deal with this artificial increase in the cost of labor:

1. Pass along increased business costs to consumers through higher prices;
2. Absorb increased costs by reducing profits (which is difficult for most small businesses already operating on thin profit margins); or
3. Reduce full-time jobs to part-time jobs, eliminate jobs entirely, or reduce/eliminate benefits such as health care.

None of those are good outcomes.

For more information on the negative impact on raising the minimum wage, see this Commonwealth Foundation study.