Wages and the cost of goods and services are two sides of the same coin. When people ask for minimum wage increases, they are also asking for minimum pricing for goods and services—they are saying they want to pay more.

The term minimum-wage sparks an emotional reaction in people. People view pay below an arbitrary amount to be slave labor. There is an expectation of wages that allow for a certain, again arbitrary, standard of living. There is an expectation that the employee should be able to afford housing, groceries, transportation, medical care, and other expenses. The term used is a living wage. There will always be pressure for the minimum wage to grow as people will always want more.

However, when consumers look to purchase a product or service they look to pay the lowest amount possible, which means they want the business to make a minimal amount. People are asking the business to make less which means the business must pay their employees less and the business owner must make less. Consumers do not care if they are paying the business enough to pay their employees and the employer “a living wage.” I often hear people complaining about the cost of goods and services even when the prices are reasonable. More often than not, they are angry about costs.

When consumers expect a business to provide a good or service for next to nothing, they are saying they expect slave labor from the business and its employees. The money a business receives from its customers goes to pay the employees and expenses of a business plus provide the entrepreneur with an income. It’s really not that much different than running household expenses.

Rather than demonizing the businesses, ask yourself if you are willing to pay the business more for the cost of the goods or service when you demand an increase in minimum wages. Are you willing to pay a living wage?

The folks who wish to set a minimum wage either ignore or simply do not understand economics and the function of money. Wages are based on many factors including skill level, the responsibility a job requires, the number of available workers, the demand for the product or service and the amount consumers are willing to pay.

The struggle to get an entry-level job or a second job to make ends meet can be very difficult at times. It can take a very real emotional toll, but the response to that toll cannot be emotional. It must be based on the laws of economics. Setting an arbitrary minimum wage only makes costs rise.

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