ECONOMICS 101

Recently, one of my liberal friends wrote a letter to the editor of our local rag in Butte regarding all the advantages he thought raising the minimum wage would produce. The paper, being a liberal publication, readily printed his letter although I saw no letters from anyone in opposition which is usually the case for this particular publication. In any event, my friend argued the usual liberal philosophy that if we raise the minimum wage we’ll be “stimulating the economy” by causing more people to spend their new found wealth. In fact, economists indicate that because Americans still have no confidence in the economy, they are saving, not spending. The fallacy of this reasoning is now apparent as Bloomberg reports that Walmart, the nation’s largest employer, raised its minimum wage to nine dollars per hour with the result that “Labor costs…have weighed on earnings…. At the same time, Walmart is trying to maintain low prices to fend off rivals.” So, Wally’s World is now cutting employees work hours and “furloughing” employees which, in turn, is adversely affecting customer service. Older employees are also disgruntled over the raise in the minimum wage paid to beginning employees. “Some of the chain’s more senior employees have criticized the increase, saying it mostly benefited newer workers and that more experienced staff shouldn’t be making at or near what new hires are making.” Of course, investors are also upset because they expect profits from investing their monies in a business and could care less about social engineering in the name of some unrealistic liberal mantra. Just imagine what impact there will be on our already shaky economy if Wally’s World joins the slew of other businesses which used to be household words and have now faded from memory. Of course, liberals really have no problem with shrinking the private sector since they believe that the government is the answer to every problem. The fact that the government doesn’t provide a tax base since it produces nothing in the way of manufactured goods (or anything else of value it is increasingly argued) is lost on those who make their living by collecting a check from those who still work for a living.