Minimum Wage Increases Will Eat Your Grandma

Minimum wage raises are not the answer to our economic woes.  They will not stop inflation, and they are only a band-aid solution to our still-ailing economy. The formula is simple, guys.  Minimum wage raise = inflation.  Sure it's a little bit long term, but there it is.  My opinions tend to be pretty unpopular in some circles (and by "some" I mean "most'), so let me tell you a story, boys and girls.  Something whimsical to make my point...

  Once upon a time, there was a girl named Little Red Riding Hood.  She was industrious and kind and worked very, very hard.  She operated a service that provided meals and companionship to lonely and hungry grandmas.  She was REALLY good at what she did, all the fat and happy grandma's could testify.

  And they did!  By word of mouth, her business doubled.  And then it tripled.  And poor Red Riding Hood was running herself to death, trying to keep the grandmas happy and fed, and keep nefarious wolves at bay.  (The little pigs were her biggest supporters.)  She decided very quickly she needed help, so she carefully selected a very competent fleet of delivery drivers, professional grandma-sitters, and big, burly wolf bouncers and, per her state's regulations, paid them all the expected salary - minimum wage.  Her business flourished, and over time some of the employees stood out.  She gave some of them raises and appointed them to management, allowing her to hire even more fabulous people to help keep her grandmas happy and the wolves away.  Then, one day, the king decreed the minimum wage should be raised.  She had to give all her helpers more, and why not?  They deserved it.  But then she was at the end of her labor budget.  She wasn't able to give her managers raises, but that was ok.  They were above the minimum wage anyway.  Everyone was happy.  Slowly, though, food prices started to creep up.  It seemed that the food suppliers had been hit by the wage increase as well, and food was getting expensive as the cost was passed down the line.  Red Riding Hood was facing new cost increases, but the worst part was, so were her workers!  The minimum wage guys (the delivery guys and the wolf beaters) fared about the same.  In the long run, none of them was any better off, but they were no worse either.  They were making more money, so they could afford it when their porridge cost a little more.  Little Red Riding Hood felt a pinch, but she was a wealthy entrepreneur by now, so she simply tightened the belt a smidge, raised her prices a bit and went on with her life.  The ones who were hurt the most were the managers.  They were making just above the minimum wage to start, and now everything was costing more?!  Slowly, the managers (the middle class) started to disappear.  Red's business started to fail because she simply couldn't keep up, and because the grandmas, who were on a fixed income, couldn't afford the price increases.  More of her management fell to simple labor because the funds had dried up everywhere else.  As the minimum wage increase took a strong hold, the pyramid started to crumble, because there was no middle.  All that was left was the bottom and a quickly disintegrating top.  Once the top was gone, the bottom began to crumble too.  The income was gone, and the money dried up.  It was at that point, the wolves paid off the workers and ate all the grandmas.  The end.

Grandma - it's what's for dinner!