The offshoot of President Barack Obama’s unilateral decision to raise the minimum wage for federal contractors, MSNBC host Rachel Maddow said on Thursday, was the chance for Democrats to use their support for wage increases as a cudgel against Republicans…
Why Raising the Minimum Wage Isn’t a Good Idea
Sunday, 17 Feb 2013 08:23 PM
By Sean Hyman
At first, raising the minimum wage sounds great, right? After all, those at the bottom rung of the economic scale get a boost.
Heck, I remember some of my first increases in wages even coming from that. When I was 16 years old, I worked at a Bonanza steakhouse and made $3.35 an hour until finally the national minimum wage was raised.
Even when I started off in life, I had to work three jobs at once because every one of those jobs was either at or near the minimum wage level. Whew, thank God things have changed a ton since those days.
So you’d think I would be for a hike in the minimum wage right? Wrong!
Raising Minimum Wage Is a Bad Way to Help People
By Clive Crook
Enthusiasm for a big increase in the federal minimum wage is building in the U.S. It’s a shame to see so much energy devoted to a policy that’s not only dubious but also sidelines better ideas.
In his State of the Union address in February, President Barack Obama called for an increase in the federal minimum wage to $9 an hour from $7.25. Recently he said he supports a measure that would raise it in stages to a little more than $10. State and local governments across the country have been going ahead on their own. The president says there’s “no solid evidence” that raising the minimum wage would cost jobs.
That’s true in a way. The effect of minimum wages on employment has been studied and quarreled about for years, and the findings are still disputed. But “no solid evidence” doesn’t mean that increasing the minimum wage to $10 won’t increase unemployment; it means we don’t know.
One thing that isn’t disputed is that increasing the minimum wage to, say, $20 an hour really would increase unemployment. The question isn’t whether raising the price of unskilled labor would at some point reduce the demand; it’s how far you can push that price before bad results become apparent. Governments generally understand this trade-off, even if they don’t always acknowledge it, and they’ve mostly been cautious. They’ve kept minimum wages low, and they’ve often made exceptions for young people or for certain low-wage occupations or both. This helps explain why even after all those studies the question isn’t settled.
(photo via DonkeyHotey)