Something very few people understand is that the United States does NOT have a purely fiat currency.
After Nixon ended the last vestiges of the gold standard, many people assumed that the dollar no longer had a government enforced "peg" to fix the value of a dollar to a commodity, but in reality labor IS a commodity.
Because of federal minimum wage law, the buying power of our currency is intrinsically tied to the value of one hour of unskilled human labor. All skilled labor is priced relative to the cost of unskilled labor. All goods and services must be priced above the cost of the labor required to produce them.
Once you realize this, it is easy to see that raising the minimum wage is the same as reducing the amount of labor a dollar can buy, and therefore reduces the amount of anything a dollar can buy.
Under the gold standard, if a politician suggested that we should reduce the amount of gold that a dollar is worth, it would be easy to see that this is a purely inflationary weakening of the currency. It is no different when they discuss reducing the amount of labor that a dollar is worth.
The instant the pegged value is changed, every dollar you have in your bank account is worth less than it was the day before. Over the course of some adjustment period the price of everything will be raised accordingly.
The most harm, however, is done to those currently earning less than the new minimum wage. Despite getting a numeric "raise" to the new minimum wage, the reality is that their buying power has been reduced to that of a person only earning minimum wage at the current rate. Add to this the number of people who will likely be laid off during the adjustment period while prices are being raised, and it's obvious that raising minimum wage causes immense harm to those currently at the bottom of the economic ladder. MORE people are now minimum wage earners, More people are unemployed, and the cost of all goods and services has gone up.
In the end, raising minimum wage is just a deliberate obfuscation of that classic currency debasement technique that corrupt governments and thieves have practiced since antiquity - shaving coins.
Something very few people understand is that the United States does NOT have a purely fiat currency.
After Nixon ended the last vestiges of the gold standard, many people assumed that the dollar no longer had a government enforced "peg" to fix the value of a dollar to a commodity, but in reality labor IS a commodity.
Because of federal minimum wage law, the buying power of our currency is intrinsically tied to the value of one hour of unskilled human labor. All skilled labor is priced relative to the cost of unskilled labor. All goods and services must be priced above the cost of the labor required to produce them.
Once you realize this, it is easy to see that raising the minimum wage is the same as reducing the amount of labor a dollar can buy, and therefore reduces the amount of anything a dollar can buy.
Under the gold standard, if a politician suggested that we should reduce the amount of gold that a dollar is worth, it would be easy to see that this is a purely inflationary weakening of the currency. It is no different when they discuss reducing the amount of labor that a dollar is worth.
The instant the pegged value is changed, every dollar you have in your bank account is worth less than it was the day before. Over the course of some adjustment period the price of everything will be raised accordingly.
The most harm, however, is done to those currently earning less than the new minimum wage. Despite getting a numeric "raise" to the new minimum wage, the reality is that their buying power has been reduced to that of a person only earning minimum wage at the current rate. Add to this the number of people who will likely be laid off during the adjustment period while prices are being raised, and it's obvious that raising minimum wage causes immense harm to those currently at the bottom of the economic ladder. MORE people are now minimum wage earners, More people are unemployed, and the cost of all goods and services has gone up.
In the end, raising minimum wage is just a deliberate obfuscation of that classic currency debasement technique that corrupt governments and thieves have practiced since antiquity - shaving coins.
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