WalMart Raises Minimum Wage

In a past article, I noted that in North Dakota, due to its economic growth engineered by the energy revolution, many minimum wage jobs are paying 15 dollars. WalMart's decision to raise their minimum wage for some 500,000 employees shows what happens in a functioning economy; namely if the economy starts to improve, wages go up. While this recovery is the weakest on record and much of the Middle Class has seen their income lagging behind, WalMart shows that markets do work just as North Dakota shows markets work.

The minimum wage debate is one of those debates that shows economic ignorance and how good intentions don’t match the results. Politicians love the idea that they can raise one's salaries and produce economic growth by simply telling businesses, “Give everyone a raise.” Of course what is missing from these debates is that biggest losers in artificially raising minimum wage are the very poor who the laws is supposed to benefit. The cynic may decide that WalMart is acting out of self-interest, but WalMart is attempting to keep good workers as well as tempting others to leave their jobs to join WalMart. This is not an argument for government increasing minimum wage but the complete opposite; workers benefit if the economy is growing. This simply shows that what one is taught about capitalists, that they will pay the lowest wages as possible; but what is not taught is that capitalists pay the wages needed to keep their workers productive and not lose their best workers. Productive workers add to the bottom line. It could be that Wal-Mart is putting pressure on their less-financed competitors and it could be self-interest that is leading to WalMart's decision but who cares?

The bottom line is that government-enforced minimum wage that is raised above what the market is will lead to higher unemployment among the least skilled workers, in particular young workers attempting to enter the job market. So if one worker gets the benefit of the higher minimum wage, another will receive zero dollars.

What this shows is economic growth is generated from the private sector and not by government edict. The biggest debate over the past decade has been how to obtaining prosperity and for the past six years, we have seen government policies that have been counterproductive to growth as the middle class, minorities, and families have yet to recover their income from 2007. Yet, we have seen businesses survive the additional regulations imposed upon them and American ingenuity like the energy revolution that has been responsible for much of our job creation. Imagine what will happen if we have economic policies that build to the strength of the American spirit.