Getting it Right - Welcome

The goal of this blog is to publish my thoughts on a variety of economic and political topics in the hopes that people who find them educational or beneficial will utilize them and/or forward to others who might find them interesting and/or worthwhile to promote to others, possibly including politicians who can push some of these ideas to fruition. The topics in my blog are meant to be of value on a long term basis, not a daily diary or political issue of the day log. If the information posted is useful to you, by all means utilize it and/or forward it as you see fit. If not useful, then merely ignore it. There are no universally agreed upon truisms and too little tolerance between some of those with opposing viewpoints to successfully convince the people with hardened opinions to move away from them. I am an analytical type person who will try to be as factual as I am able.

I disdain the current popularity of name calling and condemnation of viewpoints with no factual alternatives or logical solutions given that I see so often. If you don't have a solution based on fact and logic, then opt out of the discussion because you have nothing to contribute. My background is a degree in Economics from the University of Michigan and 39 years working in middle management jobs for a major retailer. My opinions are forged on the personal experence of life, family, friends, and work as well as triumphs and mistakes that I have made and hopefully learned from. My hope is that this blog helps you.

My first topic will be about personal finance. I chose that one first because most of us work long and hard just to survive but not all of us realize our dreams of becoming financially independent from the labors of our work. Much of our political votes/thinking also focus on the economy and in particular how well we are personally doing financially.

It is relatively simple, without sacrificing the enjoyment of living for 'today' and even at moderate incomes, to retire as a millionaire or multi-millionaire, if you focus on that goal consistently from a young age. It is also simple to ensure that your child or grandchild retires rich. It merely requires a one time gift of just $2,000 invested wisely and the passage of time. Please read my first post on this blog to learn more.


Getting it right on Politics, Economics, and Personal Finance

An index/schedule of past and future posts and their dates will always be updated so that it becomes the first post that you see below. If the date of a post that you wish to read is preceded by the word "Posted", then find it below or click on the title in the Blog archive to review.

Blog Archive

Tuesday, September 24, 2013

Why Raising the Minimum Wage Never Works

Economic lesson - why raising the minimum wage never works as intended. There are calls today to more than double the minimum wage to a "livable wage" of $15 an hour. First, based on history, raising the minimum wage prices many of our inexperienced, unskilled youth out of the job market, raising their already sky high unemployment rates. Not a good thing. Those inexperienced youth who get a first job usually join the middle class within 15 years. Those that don't get that first job when they are young, stay government dependent for the rest of their lives. Most importantly, the experienced and skilled workers logically expect to earn more money than inexperienced, unskilled workers. Many were once inexperienced and unskilled. They worked hard for years to achieve their current skills and income level. They will demand and receive substantially more than inexperienced workers. So if $15 an hour became the minimum wage, the experienced workers will receive proportionally more money than they receive today and therefore continue to receive more money than inexperienced and unskilled workers. If that didn't happen, experienced workers would actually suffer a reduction in their standard of living because in all of this, the volume of goods and services (GDP or Gross Domestic Product) is unchanged. Now we have more income chasing the same amount of goods and services. The result is inflation (goods and services cost more) and the people making the minimum wage still have proportionally less money than others to buy the same amount of goods and services available. Nobody can buy any more goods and services than they could before the minimum wage was increased because nationally there are no more total goods and services available to be bought. minimum wage increases only increase paper money, not goods and services produced. In order to increase your buying power, you must increase your contribution to the production of goods and services so that the total of these rises. In other words, you must increase your skill and/or education levels so that the value of your work makes a greater contribution to the total goods and services produced. That will get you paid more than the minimum wage. The silver lining for those people crying out for a "livable wage" is that 98% of the workers earning a minimum wage are students or youth still being supported by parents or the second member of a household with someone else earning a living wage or combined earning a living wage. Only 2% of minimum wage earners are truly head of household and the only worker in a family. They often get additional help from government. So the 'living wage' issue is really a false, minor issue. Bottom line, raising the minimum wage hurts the inexperienced, first time job seeker and also hurts savers (as their accumulated lifetime savings loses significant purchasing power due to inflation.
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