It always seems like our government seems to think that raising minimum wage will decrease poverty and boost the economy.  But the big question is does it really help the people and how does this impact inflation on a larger scale?

I truly believe that raising minimum wage does not help the average citizen for a number of reasons.  This may help our young adults who are living at home with no bills but what does this mean for the middle class workers?  I know that every time minimum wage goes up and because I am above the minimum wage line I never see a wage increase.  This just pushes me closer to the poverty line and out of the middle class even though I have been working for the same company for over 10 years.

Like all companies they always want to make more money.  With minimum wage going up, their prices go up.  What it would take to make something will now cost them more so they will charge us more, or they will find other ways to be efficient like layoffs to offset the wage cost.

Inflation of goods outweighs the wage increases we have seen over the years.  Before the 80’s there was a good balance but the last 30 years has unbalanced the middle class to a closer poverty line.  Take example of the housing market, in 1970 a house would sell for about $24,000 with an average wage of $9,400.  And now it sells for $289,000 with an average wage of $44,000.

Wages increased about 5% while the housing market increased at 2 and half times that at 12%.  We need to find a way to balance this equation so that the rich do not continue to get richer while the poor get poorer.  This formula that our governments are using of raising minimum wage is only taking away the middle class worker and making the poor out on the streets as they fall further below the poverty line.

Advertisements