I’m about to start making so much more money, I’m going to buy so much stuff. I think I might buy a house boat.

Prop 206 plans to raise Arizona’s minimum wage from the current $8.05 to $12 per hour over the course of several years. It sounds awesome. People that work minimum wage jobs will earn more money for the same amount of work, so they will be able to better support their families, right?

Wrong.

It is easy to assume that this prop will be a good thing, but we need to look deeper into this.

Let’s look at the effect this will have on businesses. Because the minimum wage has risen, the business owners are going to have to pay their employees more. Did the wages rise for the bosses? No. Therefore, the bosses are going to have to come up with extra money to pay their employees with.

So what are they going to do? I can tell you now that most business executives are not going to take much money out of their own salary. They are going to cut working hours and/or jack up the prices of their products.

But no big deal right? Everything has just raised in cost to shift to the new minimum wage standard so it is the same! Wrong again. Here are two reasons why: some people will not be able to afford what they once could and all the money that people have saved up over the years will decrease in value.

Because your wage has risen by about 50 percent, congratulations! You have have been moved to a higher income tax bracket! Now, instead of paying the original percent of your income, you are paying an even higher percent of your money. Suddenly, you do not have the equivalent amount of savings as before.

And don’t think the tax brackets will change accordingly either; this is on the federal scale, so they are not going to change the whole system just because Arizona changed.

What about the middle and upper class people that are doing just fine and have saved up money over the years? They get hurt too. All that saved money will remain the same, even though inflation has blown up all around it. In turn, the money that was once worth so much is now worth considerably less.

Not one part of the system will be benefitted. The lower class loses their precious working hours, the middle class loses value in their savings, the upper class loses money having to pay their employees more, and everyone pays a higher percentage of taxes to the government.

There is only one winner here: the federal government.