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President Obama proposed raising the national minimum wage to $9/hour during his State of the Union address drawing cheers from the left.
Unfortunately they have little understanding of economics. Forced minimum wages will destroy or offshore many more jobs in America.
The left doesn’t seem to understand that the state can’t raise the standard of living for a populace through wage legislation. Additionally, raising the minimum wage doesn’t address the root of the problem of why the standard of living is declining in the first place.
Those who genuinely care about social justice look for someone to blame for the declining standard of living; greedy business men, illegal immigrants for driving down wages, politicians who oppose minimum wage laws and so on. None of these are the real enemy.
As G. Edward Griffin wrote in The Creature From Jekyll Island;
The American people have no idea they are paying the bill. They know that someone is stealing their hubcaps, but they think it is the greedy businessman who raises prices or the selfish laborer who demands higher wages or the unworthy farmer who demands too much for his crop or the wealthy foreigner who bids up our prices. They do not realize that these groups also are victimized by a monetary system which is constantly being eroded in value by and through the Federal Reserve System. (pg. 33).
Our fractional reserve fiat monetary system has inflation built into it, causing higher prices for all goods and services. When wages aren’t increased to match the higher cost of living, workers feel the pinch and demand that lawmakers do something.
However, the answer to social justice isn’t raising wages through legislation, because that will in turn just raise the cost of living even more because businesses will have to pass those costs on to customers. Not because they’re greedy, but because they have to survive.
For those who really want social justice, the solution is addressing a blood-sucking monetary system and restore sound money. Until then, all actions will be counterproductive to their good intentions.
Here’s a short video that clearly explains the consequences of raising the minimum wage in global economy:
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