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The raising of the minimum wage is counter-productive to having a healthy and full growth economy. Artificially forcing higher return for employees in the way of higher wages only produces an increased demand on business assets.The demand for more money in the economy produces upward inflationary pressure.

New demands of meeting the cost of increased payroll puts additional pressure for price increases in order maintain profits, to meet and exceed the break-even level. Higher prices without higher output produces inflation and a higher cost of operation. The good old Friday night out for pizza and beer increases the cost to not only the customer but also to the employee who must pay an additional costs.

The additional costs that are bore by the proprietor are multiplied when the costs of government are added against the employer. These costs must be met by increased pricing to meet expanding employee costs, such as Social Security and state unemployment compensation, and additional increases in the supplier's budget's that further add to the cost of goods sold and a declining profit margin that permits the business owner pay their own cost of living expenses.

The fact is that we live in a country that increases taxes by the number of dollars that are remaining when all expenses have been met. The net result is that the higher the numbers, the higher the progressive taxes that cause inflation and remove operating capitol from the economy. An imbalance between what is expensed to the required offsetting income is detrimental to both employer and employee. How many of the reader's have gotten a raise in salary only to find less money in the weekly take home pay. Somebody is forced to pay for these deficits in operating income. It is entirely to easy and counter productive to the economy to add additional costs without any increased return.

Yes, raising the minimal wage scale may appear to be a great way to elevate the poor to a tax-paying level and expanding the economy. The truth of the matter is that additional costs that domino through the economy hamper growth in G.N.P. This may look like more money to waste on non-productive programs but in the end the economy suffers loss.

Learn more about this author, Francis Palmieri.
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