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Chairman Schlafly Commentary
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Inflation Hurts All Americans
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This month, the city of West Hollywood raised the minimum wage in its community to $19.08 per hour, which is now the highest rate in the country. Other Californian cities have also just enacted new wage increases. Meanwhile, hotel workers in Los Angeles are on strike because the high cost of living in the city makes it difficult for them to live close to where they work. These strikers are demanding an immediate $5 per hour wage increase on wages that run between $20-25 per hour.
The dog is chasing his tail. Simple economics teaches us that raising the minimum wage leads to an increase in the cost of living. By forcing companies to pay workers above the prevailing wage, the government is causing inflation. Neither the quality nor the quantity of work has increased, but now everything is more costly. Increased labor costs always lead to an increase in the cost of goods. These low-wage workers will not get any financial benefit, because their new salary will be consumed by the increased cost of goods to pay for their mandatory wage hike.
Where does inflation end? When our government stops throwing money at the problem. The inflation of the last three years is due to our government printing and spending trillions of dollars. This cash flooded the marketplace and led to an escalation of costs. Meanwhile, the workers who received government subsidies could quit their jobs and businesses had to raise wages to attract workers. Then prices rose.
Nobody wins with inflation. In the 1970s, President Nixon tried to use mandatory wage and price controls to control inflation. He failed. President Ford tried to "whip inflation now." He failed. President Reagan finally quelled inflation in the 1980s by getting the government out of controlling the marketplace.
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Anne Schlafly is the daughter of Phyllis Schlafly and Chairman of Eagle Forum.
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