State of the Union

The Push For a Higher Minimum Wage Ignores Economic Reality

The push for minimum wage ignores low income earners.

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President Barack Obama and Democrats in Congress want to raise the minimum wage to improve the lot of the working poor. But they've got the wrong idea. The problem is not that these workers earn so little; it's that the things they buy cost so much. I propose instead to outlaw high prices.

No one, after all, likes paying too much. So let's put a stop to it. Gas is too expensive? Make it $2 a gallon, max. Bread and meat take a big bite out of the family budget? Poor people could eat better if they had to pay only $1 a loaf and $1 a pound.

Clothing, footwear, cars, you name it—if the government held their cost down, life would be more affordable for low-income workers.

In his State of the Union address, the president said, "Tonight, let's declare that in the wealthiest nation on Earth, no one who works full time should have to live in poverty, and raise the federal minimum wage to $9 an hour." He might just as well say that no one should have to spend too much of their income on essentials. So why not limit the cost of those essentials?

Those acquainted with the laws of economics will immediately spot the flaw with my idea. When the price of something falls, demand for it rises, but supply does not. If you tell oil companies what they can charge for gasoline, they will reduce the amount they sell, creating shortages.

Likewise, if you put a price ceiling on bread and milk, or shirts and shoes, consumers will buy more of them, but stores will stock less of them—or, if the price is low enough, none.

We all know we're more likely to go shopping when there's a big sale going on. Retailers don't try to entice customers by announcing price increases. The more expensive something is, the less people will buy.

But those pushing for a higher minimum wage pretend that labor is an exception to the rule. The administration can point to a few economists who claim to show that raising the minimum wage doesn't raise unemployment among low-paid workers. Dean Baker and John Schmitt of the Center for Economic and Policy Research in Washington insist that when employers are forced to pay higher wages, they reap large benefits, in the form of higher productivity and lower turnover.

This is the liberal equivalent of the conservative belief that tax cuts always pay for themselves. Anything so ideologically convenient just has to be true.

But if businesses came out ahead by increasing pay at the bottom, they wouldn't have to be forced into it. They would act on their own, in the relentless pursuit of profits. Instead, many employers have calculated—based on real-world experience meeting payrolls and competing with rivals—that higher pay for entry-level workers is not a free lunch.

Raising the minimum wage may indeed raise average worker productivity—not by inducing existing workers to work harder or smarter, but by inducing companies to get rid of less productive workers. If you raise the floor from $7.25 an hour to $9, employees whose work output is less than $9 an hour will be let go.

Saying that a higher minimum wage would increase productivity is like saying that banning anyone under 6-foot-10 will make NBA players taller. It will, but not because anyone will grow.

Even the famously liberal Nobel laureate economist Paul Krugman has pointed out these realities. On the blog EconLog, economist David Henderson of Stanford's Hoover Institution cites a 1998 article in which Krugman ridiculed those who "very much want to believe that the price of labor—unlike that of gasoline, or Manhattan apartments—can be set based on considerations of justice, not supply and demand, without unpleasant side effects."

Obama argues for an increase by saying no one who works full time should remain poor. One fact he doesn't mention is that the great majority of people who earn the minimum wage are not poor. More often, they're middle-class teenagers.

Another likelihood, which he denies, is that while some workers will go from $7.25 an hour to $9 an hour, others will go from $7.25 an hour to zero. They won't be poor despite working full time. They'll be poor because they're unemployed.

Maybe this won't happen because the laws of supply and demand will be suspended. But would you want to bet your job on it?

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188 responses to “The Push For a Higher Minimum Wage Ignores Economic Reality

  1. Why not a $1 bajillion kajillion trillion billion minimum wage?!

    I JUST ENDED POVERTY! Nobel Peace Prize, please!

    1. Next you’ll suggest the government mint $1 trillion coins to pay for it’s operations…oh.

      1. It’s the platinum metal that gives them the special powers.

  2. Saying that a higher minimum wage would increase productivity,

    Forgive me, I don’t speak leftist retard as well as some. But how can anyone make such an argument? I can’t even think of a single reason why that might be true.

    1. That’s because it’s not true.

    2. People will feel like they’re being paid what they’re worth. They will also have less to worry outside of work since they’re now making more money. They will be happier at work and happier people are more productive.

      1. …until they’re fired because their employer can’t afford them any more.

        1. Pssh, that’s, like, in the future, dude.

          1. “Are all men from the future loud-mouthed braggarts?”

            “Nope. Just me, baby. Just me.”

            1. “Hail to the King, baby.”

              1. “Shop smart. Shop….S-Mart.”

              2. +1 Duke Nukem

        2. At least they got fired from a higher paying job, so they can feel good about that!

      2. Until prices go up, and their increased wage no longer buys as much. Then I guess we’ll have to raise it again to make them happy once more.

        1. Stop ruining the socialist talking points with economic reality. What next, you’ll tell us that mandating insurance companies to cover breast pumps and every other feel good liberal project, taxing medical supply manufactuers, and price fixing via the actuaries will actually increase health care costs? “Hummpppfff” says the socialist, “I’m going to bury my head in Obama’s ass again.”

    3. I can see how it could increase average productivity per worker, for the reasons he mentions: that less productive workers who produce less than $9/hour worth would be eliminated. But I don’t see how it could increase overall productivity.

      1. It is overall productivity that matters. If that logic were true, we would be better off eliminating every job that paid less than a million dollars. Think of the incredible productivity of that.

        1. Oh, I agree. But there is some tiny, irrelevant kernel of sense in there.

    4. The idea is employers when forced to pay the higher wage will increase their expectations of the workers productivity.

      If you think of people as collections or groups, then this group may become more productive. Unfortunately, they will not necessarily be the same individuals.

      Like gentrification makes a neighborhood better, but only by pricing out the existing individuals.

      1. The idea is employers when forced to pay the higher wage will increase their expectations of the workers productivity.

        That is completely fucking retarded. Businesses have every reason to expect their workers to be as productive as possible. If there is a way to make a worker more productive, an employer will do it because the employer does better the more productive his workers are.

        1. They really think that businessmen arent smart enough to pay more to get more productivity today.

          They have to be forced into it.

          I mean, look, something like 87% of all employees are working for the minimum wage right now! Clearly the employers are idiots!

          1. They really seem to think that the way to start a business is just to pay everyone minimum wage, like skilled workers don’t have any other options but to work for what you will pay them.

            1. Most of the people that support this shit are lazy, barely competent workers. The minimum wage is the federal/state union for shitty workers. “It doesn’t matter how shitty of a worker this person is, you must pay them X”.

              1. Partially true. The minimum wage is designed to price out low wage workers. Their unemployment isn’t a bug. It’s a feature. It forces the employer to hire marginally more skilled (more often union) workers.

            2. The company that I work for announced that they’re closing the end of June. Two weeks ago they had a company-wide meeting where they broke the news. All of the manufacturing workers were going nuts about how unfair it was. All of the office workers were making plans to dust off the resume.

              1. my goal is 2 interviews a year — for positions that i would actually want. just to keep up with what the market is looking for and paying.

        2. It may not make sense, but as I understand it the belief is that people who are paid more will feel like they’re worth more and thus will be more productive to match up to their new self-worth.

          1. That may be true. But in places that it is, the employer will figure out that it pays to pay their workers more.

        3. This is not what they think. These people are far more simplistic than that. What most of them do (the rank and file supporters of this) is recall when they worked for minimum wage and go “man it would have been so much better if I made more money then and it’s the same for people working minimum wage now”. The politicians, who probably never worked minimum wage, just know it’s buying off the rank and file sheep.

          These people are deeply stupid. Don’t look for ideological substantiation when simple answers will suffice.

          1. And the funny and sad part is that people who work minimum wage jobs are by and large not poor. The idea of there being duel incomes in a household is completely beyond their comprehension.

          2. Actually, no. Just try to remember that low skilled labor can be replaced with semi-skilled labor and you’ve made the first step to understanding motives.

    5. John| 2.21.13 @ 10:47AM |#
      “Saying that a higher minimum wage would increase productivity,”

      “Forgive me, I don’t speak leftist retard as well as some. But how can anyone make such an argument? I can’t even think of a single reason why that might be true.”

      John,
      The article showed one example; if I’m the employer, the workers with less productivity get fired.
      There’s another example, and France is the case study. No employer in France hires anyone unless it it absolutely necessary. They’ll buy ten automated machining or assembly centers and hire one guy to run them. Presto: Instant per-capita productivity increase.

      1. That assumes that a business can never over invest in capital, which is just bunk. If it would have been cheaper to pay three people $5 an hour to do the work, then buying the machine to do it is a net loss.

        1. I think his point is that France has made it so ridiculous to hire someone that it’s actually cheaper to buy the machines then hire the three people.

          1. There are times I wonder if John’s missing his coffee or has spit all over the screen and can’t read…

            1. You just don’t understand what I am saying. See Rob below. At best people are confusing per capita productivity with total productivity.

              1. John| 2.21.13 @ 11:53AM |#
                “You just don’t understand what I am saying. See Rob below. At best people are confusing per capita productivity with total productivity.”

                There’s no confusion; those are two separate metrics.

          2. I think his point is that France has made it so ridiculous to hire someone that it’s actually cheaper to buy the machines then hire the three people.

            Yes, but that doesnt increase productivity.

            1. “Yes, but that doesnt increase productivity.”

              Yes, it increases per-capita productivity.

              1. Do you mean per-capita in the country or per-worker?

                Who gives a fuck about per worker productivity?

                It doesnt increase per-capita (country) productivity, it decreases it.

                1. robc| 2.21.13 @ 11:54AM |#
                  “Do you mean per-capita in the country or per-worker?”
                  Uh, per-capita *means* per-person.


                  1. Uh, per-capita *means* per-person.

                    I know, but that is so clearly wrong that I was giving you the benefit of the doubt. Thanks for clearing up that you know what the word means but you are otherwise a moron.

                    1. Boy, whole lots of folks getting their pants in a wad over facts this morning.
                      robc, meet John; you two can spend the morning griping about where the sun comes up.

                2. Well, yeah, but it’s generally per worker that’s measured.

              2. Yes, it increases per-capita productivity

                By eliminating lower productivity workers from the work force. There is the slight of hand. These people are either pretending or are too stupid to understand that increasing average productivity by eliminating less productive workers is not the same as increasing average productivity by making people more productive.

                I go back to my original assessment. It is a retarded and irrational argument.

                1. “It is a retarded and irrational argument.”

                  It’s not an argument, it’s a fact.
                  You may not like it, but that doesn’t change the matter one bit. France has very high per-employee productivity. That is a result of the French employment law and also the reason that the french have a very high unemployment rate for *full time* employees.

                  1. France has very high per-employee productivity.

                    That is the point, they have a low per-capita productivity. Because all those unemployed people in the denominator pull it down.

                    1. If they are not producing, they are not in any productivity per person calculation.

                      I think you mean that France is has low gross productivity, because so many people are not involved in any production, yes?

                      /economic argument shit-stirrer

                    2. If they are not producing, they are not in any productivity per person calculation.

                      Not true. If Im calculating France’s productivity per capita, Its going to equal (gross productivity)/(total population).

                      If you are alive, you are in the denominator. Retired, unemployed, infant, whatever, you are in the per capita calculation.

                    3. “Not true. If Im calculating France’s productivity per capita, Its going to equal (gross productivity)/(total population).”

                      That’s usually called GDP/per capita.

                    4. Except find me a measure of per capita productivity and not per worker.

        2. John| 2.21.13 @ 11:32AM |#
          “That assumes that a business can never over invest in capital, which is just bunk.”
          It does nothing of the sort.

          “If it would have been cheaper to pay three people $5 an hour to do the work, then buying the machine to do it is a net loss.”
          Yes, and the minimum wage means that’s not possible, so raising the minimum wage increased per-capita productivity at the loss of jobs.

          1. The point is it decreases OVERALL productivity.

            1. robc| 2.21.13 @ 11:42AM |#
              “The point is it decreases OVERALL productivity.”

              How so?

              1. Because the three people you just fired’s productivity goes to zero. If overall it is cheaper to hire people than it is to buy the capital equipment, you are less well off and less productive buying the equipment.

              2. You are producing the same amount of stuff, you are just using less people to do it.

                1. John| 2.21.13 @ 11:56AM |#
                  “You are producing the same amount of stuff, you are just using less people to do it.”

                  Exactly. For the same reason we use bulldozers instead of guys with shovels.

                  1. If the bulldozer is more efficient, it will be used regardless of the minimum wage.

                    If the shovel is more efficient, a high minimum wage will cause employers to shift to the less efficient bulldozer.

                    1. robc| 2.21.13 @ 12:11PM |#
                      “If the bulldozer is more efficient, it will be used regardless of the minimum wage.”

                      Define efficient. You’ll find the definition includes per-capita productivity.
                      You guys are acting as if this were some sort of moral issue. It’s not; it’s a statement of a metric and examples of how the minimum wage affects that metric.

                    2. Define efficient.

                      Return on investment.

                    3. robc| 2.21.13 @ 12:17PM |#
                      “Define efficient.
                      Return on investment.”

                      Which means comparing what the shovel does to the competing labor costs; per-capita output.

                    4. it’s a statement of a metric and examples of how the minimum wage affects that metric.

                      Agreed. And if the machine scores better in that metric, then it will be used regardless of the minimum wage. If the minimum wage excludes using workers, then the machine will be used despite the fact that low income workers would score better.

                      The minimum wage law can NEVER increase efficiency, it will either have zero effect or a negative effect.

              3. Lets say that 3 guys making $5 per hour can make 100 widgets per hour.

                Lets say a machine costing $15 per hour can make 90 widgets per hour.

                If the minimum wage in $9 per hour, the company will go with the machine instead of the 3 guys, and will get 90 widgets instead of 100 for their $15.

                1. robc| 2.21.13 @ 11:57AM |#
                  “Lets say that 3 guys making $5 per hour can make 100 widgets per hour.
                  Lets say a machine costing $15 per hour can make 90 widgets per hour”

                  Yeah, if you assume the machine costs more per hour than the minimum wage, you just sort of assumed the answer rather than finding it.

                  1. If the machine costs less per hour, they would shift to the machine regardless of the minimum wage, so that situation doesnt need to be considered.

                    You are making the mistake I said the lefties were making above, assuming employers are idiots.

                    I quote myself, from 11:02 AM:

                    They really think that businessmen arent smart enough to pay more to get more productivity today.

                    They have to be forced into it.

                    1. robc| 2.21.13 @ 12:16PM |#
                      “If the machine costs less per hour, they would shift to the machine regardless of the minimum wage,”

                      Cost less per hour compared to *WHAT*? The labor cost.

                    2. Cost less per hour compared to *WHAT*? The labor cost.

                      Yes.

                      DO THE FUCKING MATH.

                      Lets lay it out:
                      Default labor costs, $5 hr for 3 employees=$15.
                      Post min wage labor costs, $9 hr for 3 employees=$27.

                      3 possible machine scenarios:
                      A: Costs $10/hr to produce same as 3 employees.
                      B: Costs $20/hr.
                      C: Costs $30/hr.

                      Situation 1(A-C), no min wage law:
                      Company would buy machine A to replace employees, but wouldnt get B or C.

                      Situation 2, min wage of $9/hr:
                      Company would buy machine A or B to replace employees, but if C was the option, would give the employees the raise to $9.

                      Cost for widgets by scenario:
                      1A: $10
                      1B: $15
                      1C: $15
                      2A: $10
                      2B: $20
                      2C: $27

                      In no case does the min wage law lead to increased efficiency, in two of the 3, it decreases efficiency.

                    3. Robc is correct here.

                      And there’s one further point to consider in substitution capital for labor.

                      Labor is inherently more flexible. The Capital cost of $15/hr is arrived at by dividing the total cost of the machine by the number of hours that it can be used and the marginal cost of operation.

                      But what if you don’t have the volume to run the machine 40 hours a week, 52 weeks a year? Then it becomes even less efficient than labor.

                      Or what happens if you need to shift the production process? Labor can be retrained, machinery can’t be repurposed as easily if at all.

                    4. I have looked at it based on constant demand, rising demand, falling demand and machine costs above and below labor costs and you are correct.
                      I can find the curves converging farther out on the rising demand model, but the curves never cross.

    6. If you have to fire 10% of your workforce , you have to make the other 90% work 11% harder to make up the difference.

    7. “Saying that a higher minimum wage would increase productivity”

      That’s actually probably true. The least paid employees are probably the least productive. Raising minimum wage will result in management getting rid of the worst of that group and keeping the best.

      So the ‘average’ worker productivity will almost certainly go up, even though total output might well fall. Of course your average Liberal will probably refuse to admit that anyone will actually lose their job in the process. That’s where the full on retard kicks in.

    8. Labor is most simply expressed as Output/Wage. By definition, increasing the wage without increasing output results in a decrease in productivity.

      If the increase in wage results in decrease in other inputs, such as capital and technology, then there may be even greater loss or labor productivity as each laborer has less equipment to work with, while being paid a higher wage.

  3. But, but, but how do you expect a family of four to survive on $7.25/hr you monsters?!?

    1. That is $29 per hour is all four are working.

      At 2k hours per year, that is $58000. Seems like they can survive just fine.

      1. You expect people to have two cars, premium cable, three iPhones, a big screen TV, and a 2500 sq ft home on X,000/yr? What kind of monster are you?

        1. Hmm, interesting how $58 got turned into X.

          1. CAN I SOLVE FOR “X”??!!! $58!! What do I win?

            1. Free access to our premium commentary section in Hit & Run!

              go to reason.com/blog and comment now!!!

  4. Raising the minimum wage may indeed raise average worker productivity — not by inducing existing workers to work harder or smarter, but by inducing companies to get rid of less productive workers.

    Well then, easy solution: get Congress to pass a law banning any business from ever firing or laying an employee off, ever. Problem solved. If that means that some KKKORPORASHUNZ can’t earn a profit (eww, profit!) then too fucking bad. They shouldn’t be so focused on the bottom line. There’s more to life than making a buck! /lefty retard

    1. get Congress to pass a law banning any business from ever firing or laying an employee off, ever.

      Its bad enough that Rand gave them a blueprint, stop reenforcing the idea.

      1. The NLRB blocking Boeing’s expansion in SC is straight out of ‘Dog-eat-dog’ legislation in Atlas. Really, don’t give them any more ideas.

        1. Lefties keep telling us that Atlas is wildly unrealistic, but then they act it out.

        2. The worst one so far was the “Reasonable Profits Board” that popped up when oil companies starting doing well. I’m not sure Rand could have even made that up.

    2. Then we could be just like France.

    3. Well then, easy solution: get Congress to pass a law banning any business from ever firing or laying an employee off, ever.

      And that’s practically guaranteed to keep worker productivity high, because they will feel so much more secure in their jobs!

  5. But those pushing for a higher minimum wage pretend that labor is an exception to the rule.

    Oh, no, Steve, they’re not pretending – they do believe it as a matter of faith!

    “Why, how DARE you commoditize LABOR? Blasphemy! Heresy! Labor is special because – it’s labor, for Christ’s sake!”

    1. The socialist left will always ascribe some moral value to certain economic goods to then make the question-begging assertion that said goods should not be subjected to the Laws of Supply and Demand, e.g. Labor, Medical care, Water, Pornograpy, etc.

      The socialist right does the same thing, let’s be honest about it.

      1. Sorry, the correct verb is “assign,” not “ascribe.”

        1. I think you were looking for “make up”

    2. Isn’t the point of unions exactly to commoditize labor?

      1. That’s the unintended consequence – the point was to harness bargaining power.

    3. Mix it with raw materials, and voila! private property.

  6. Saying that a higher minimum wage would increase productivity is like saying that banning anyone under 6-foot-10 will make NBA players taller. It will, but not because anyone will grow.

    That’s a good analogy to explain the rise in productivity. I lost count of how many times the left has come out with this BS statistic showing that the increase in the minimum wage is good for the economy and employers because “it raises productivity.”

    This is my take on the minimum wage and why it leads to unemployment. It also explains (without straight saying it) why the apparent increase in “productivity”.

  7. It seems to me that there is a lot of outrage at government’s indifference to its destructive ways, but not as much as there should be. Therefore, I believe that Congress should institute a nationwide minimum rage program.

    1. A minimum rage is racist against Asians.

      1. You wanna see someting REALLY racist against Asians? Minimum lage.

        YEAH, I SAID IT

    2. If it wasn’t for the 1%ers like Warty and STEVE SMITH hogging all the rage there would be enough to go around.

      1. There’s no doubt that some have exploited others to hoard rage. I’m no socialist, but even I can see the need to redistribute some rage.

        1. That rage, you didn’t feel it.

      2. I am not a rage prepper. That suggestion is infuriati…RAAAAARRHGH WARTY SMASH

  8. “One fact he doesn’t mention is that the great majority of people who earn the minimum wage are not poor. More often, they’re middle-class teenagers.” -maybe because it isn’t fact? Yes there are a lot of teenagers out there working minimun wage jobs, but that does not take away from the vast amount of people 30, 40, 50, etc. that are also making minimum wage, working two jobs. Sometimes they work three just to support their family because they can’t make it on minimum wage when the costs are rising so much. And your point about regulating costs was redundant; so you stated yourself, so was the point of this article to waste space? Because that’s all you did sir.
    Maybe what you could have stated instead was that yes, minimum wage is below what it should be, but that alone will not save this bumbling economy- that is far from being fixed by the way- from crashing and burning. Maybe what congress should instead be worried about is their over indulgence in spending all of this money that we dont have. Do you know that I make over minimum wage, and by the time these idiots in congress have taken out all of their stupid taxes, I make LESS than minimum wage????
    9 dollars an hour isnt goingt o make a dman bit of difference when they hike up the taxes again to go with it. smh.

    1. “Maybe what you could have stated instead was that yes, minimum wage is below what it should be,”

      No, it isn’t. Read the article again.

      1. you read it again. I ve already wasted enough time on this dumb article.

        1. No YOU read it again

        2. Jamie1985| 2.21.13 @ 11:44AM |#
          “you read it again. I ve already wasted enough time on this dumb article.”

          I see. Well, you probably are qualified for the minimum wage, and I’m sorry it’s over $0.25/week.

    2. minimum wage is below what it should be

      Any minimum wage greater than $0 is too high. “Less than” doesn’t even enter into the conversation. The minimum wage is in abomination, only accepted in the US because our economy has been such a juggernaut for so long that the min wage didn’t matter. Most jobs paid way more.

      Now that we’re softening for real, and for what looks like a good, long time? Yeah – that “min” wage is costing jobs fer reelz.

      “Less than it should be”? Does not compute. Anything greater than $0 is an abomination. Period.

      PS Also, from BLS “Although workers under age 25 represented only about one-fifth of hourly-paid workers, they made up about half of those paid the Federal minimum wage or less.” So – yeah, by far “most” min wage workers are the young, often students. Not 40, 50, 60 with a family and only the min wage job to provide for them. Nice try, though

      1. I think $.01 would be OK. Otherwise you could hardly call it a wage. But no law is necessary for that.

    3. Half of the people making minimum wage (or less) were under 25 in 2011.

      http://www.bls.gov/cps/minwage2011.htm

      So no, it is you who was wrong.

      1. late PWND

        1. *hangs head in shame*

      2. Also, waiters/bartenders are a big chunk of the “minimum wage or below” workers, and many of them make bank. I know some bartenders who at peak times on Fri/Sat night are making $50+ per hour. At slower times they are merely making $20 per hour. But they count in the minimum wage stats.

        1. When I was a waiter my paychecks were zero more often than not because the taxes on my declared tips equaled or exceeded my hourly wage.

        2. I think bartending saved me in law school – even at the grumpy shot and a beer place I was working, I made enough in tips to put food on the table.

    4. Maybe what you could have stated instead was that yes, minimum wage is below what it should be

      If I wish to work for a rate below an artificial wage floor help me understand how it is any of your or the government’s business to interfere in the consensual exchange between adults of labor for pay. Is it my body to do with as I want free from governemnt interference or is it not?

    5. I could tell that was going to be a load of stupid just from the text density and style of punctuation.

  9. Yeah, I was so fucking stupid that I worked just as “hard” for minimum wage regardless of the level – it increased several times back in the late 70’s/early 80’s when I was in school.

    And then they made me the manager, and I made even more money. And I basically worked just as “hard”, just in a different kind of work. And then I started working in industry and made even more money. And ditto for “working hard.”

    And I basically work just as “hard” today as I did when I was 16 – meaning, I work as hard as I can. And I think that’s why I’m making more money than I ever dreamed possible. Cause employers DO see that, and they want it. You can teach that to a small degree, but not much – it’s kind of a personality trait, and not too subject to improving or worsening. And if I got fired and had to take a min wage job tomorrow, I’d work just as “hard” as I could. Cause I’m just wired that way. And so are other people.

    Cause it’s a mentality. Little tip from me to anybody: people who say they’ll work harder for more money WON’T. Ever. I’ve hired everything from entry-level mfg. people @ $10/hour to Execs, and you look for the work ethic in all of them, and evidence that it’s real nd they can cite examples. If they say “I’ll start as soon as I get X job” – run away as fast as you can. Those people will always suck, and deserve to work at your competitor’s shop…:)

    1. Any minimum wage employee who works hard wont be working for minimum for long.

      1. You know this to be true. I’ve taught my kids, and it appears they’ve listened! All into mgt earlier than I did it – makes me proud 🙂

        When they were little I used to brainwash them with, “How do you make more money?” They learned the correct answer was “Because you WORK…” – harder or smarter or more or more effectively/efficiently, etc. You don’t get more because you WANT it – you get more because you EARN it.

        Over time – anomalies aside – this has been my experience 100%.

    2. “people who say they’ll work harder for more money WON’T. Ever.”

      Question for such people…

      If this is true why are you not working in a field that pays piece work (you get paid for each work unit completed, not for the time you spent doing it) or comissions?

    3. Some manage by working hard, some by working smart. Employees with an ox-like tolerance for drudgery are fine but if you?ve ever been to China you?d see it doesn?t necessarily lead to them having more more than ever dreamed possible. Didn?t Tom Sawyer show an aversion to hard work can also lead to success? How about Barack Obama or George Bush?

      What little I found of interest in the article (slightly better than his last North Korea piece) is found here:

      ?that the price of labor — unlike that of gasoline, or Manhattan apartments — can be set based on considerations of justice, not supply and demand, without unpleasant side effects.?

      I?m not really interested in the question that is exercising Chapman and everyone here about the relation between productivity and wages, but rather that, out of consideration of justice, the price of labour CAN be set, but of course WITH unpleasant side effects. The question comes down to ?Are those side effects worth it??

      1. Re: MTrueman,

        out of consideration of justice, the price of labour CAN be set, but of course WITH unpleasant side effects. The question comes down to “Are those side effects worth it?”

        Worth it for whom? You? Me? Your dog? My pet worm?

        You don’t get to decide for others – PERIOD. The wage is something that is negotiated by the employer and the employee before the final handshake, not something to be set by goodist busybodies that had no skin in the game to begin with.

        MYOB!

        1. ?You don’t get to decide for others?

          But surely you must be aware that like it or not, there is a minimum wage set by various governments. It is certainly not negotiated by the employer and employee.

          ?Worth it for whom? You? Me? Your dog? My pet worm??

          In an ideal world it would be worth it for all of you. However, in a country, even a country under god, of 300 million, satisfying everyone is probably not possible. You want to deal with injustice, somewhere down the line compromise is inevitable. I don?t see any way around this.

  10. Also, my favorite Steve Chapman column continues to be “Steve Chapman is on vacation this week.”

    1. Well, give him some credit, this article actually sounds libertarian!

  11. My liberal Facebook friends are pointing to San Francisco as a success story for an increased minimum wage. Cherry-picking an outlying data point is okay when doing so “proves” what we want to believe.

  12. Some strategy needs to be worked out that increases wages, since they’ve been stagnant for almost everyone for decades now, with almost all increases in productivity and profitability being turned into more wealth for only those at the top of the ladder. Economists who think this is a real problem think raising the minimum wage is only a necessary first step.

    The fact is there is not empirical evidence of a correlation between raising the minimum wage and increasing unemployment rates. While it makes Econ 101 sense that raising the cost of something reduces demand for it, the extra element is that “labor” consists of people who will go on to spend their extra wages in the economy, hopefully contributing to a virtuous cycle of growth and employment.

    The central problem with our economy is that wages for most people are the bare minimum of what they need to both survive and contribute to economic growth. Decades of living by a philosophy, ridiculed in this very article, that employs all imaginable strategies to funnel wealth upward, hasn’t worked. Unless you ascribe the motive to the champions of this philosophy not creating a robustly productive economy but looting the country for its wealth and stashing it offshore. In that case it’s worked like a charm.

    1. We are now at DerpCom 1.

    2. Tony| 2.21.13 @ 11:37AM |#
      …’Economists who think this is a real problem aren’t worth listening to’…

      Fixed.

    3. Re: Tony (no spaces)

      Some strategy needs to be worked out that increases wages, since they’ve been stagnant for almost everyone for decades now,

      They haven’t been stagnant. In fact, purchasing power has increased thanks to increases in productivity and the importation of cheaper Asian products. Get your facts straight.

      The fact is there is not empirical evidence of a correlation between raising the minimum wage and increasing unemployment rates.

      Yes, there are. You just choose not to believe they exist, that’s all. Just for starters, the demand for immigrant (non-legal) labor increased all through the late 1980s throughout the 2000’s precisely because the minimum wage is too high in the U.S. There’s also the role that payroll taxes play in keeping labor artificially high in the U.S.

      the extra element is that “labor” consists of people who will go on to spend their extra wages in the economy,

      This is the most often-cited fallacy coming from leftists: The aggregate demand fallacy. Sure, people that make more money will spend it, but by raising the minimum wage you will inflict a reduction in wage earners that will erode ANY such gains.

      1. Here’s an example of what I am saying, Tony:

        Imagine a company with 10 employees making $7.25 Hr. That’s $15,000 per employee per year or $150,000.00 as cost for the company per year.

        If you increase the MW t $9.00 an hour, that’s a 24% increase. It comes to $19,000.00 per employee per year or $190,000 for the company, a increase in cost of $40,000 which represents the cost of THREE EMPLOYEES per year at the previous wage level. In order to keep his current earnings, the employer will have to let go 3 employees (letting go only 2 still keeps cost above 150K). So that would be 3 employees less or $57,000.00 LESS in the economy to be spent and an expenditure of $133,000 for the company only. All because of a 24% MANDATORY INCREASE in cost of labor.

        So where is the advantage? And don’t tell me the above doesn’t happen, because it does happen every time the MW is increased.

        1. I don’t know if it happens or not. All I know is that there is no hard evidence that shows overall employment rates are significantly affected by minimum wage changes. Your intuition may make you think it does, but your intuition leads you to believe all sorts of far more outlandish bullshit, so I prefer to go with evidence.

          We’ve had minimum wage laws in place for a long time, during periods of nearly full employment and periods of high unemployment. This suggests that employment rates are affected by larger factors.

          Being against a minimum wage suggests you believe that there’s no such thing as underpaid workers. But that isn’t the case in reality (there aren’t people scouting for fry cooks, and many workers, such as immigrants and young people, tend to accept whatever wage is given them even if it undervalues their labor).

          The virtue of a minimum wage is that it effects a downward redistribution, resulting in the economic benefits I referred to above, as well as the ones referred to elsewhere here (reducing turnover, etc.)

          For the purely moral argument–if you’re working full time and doing hard work, you should at least be able to feed yourself. Lots of full-time workers are on food stamps. That’s not an argument for the virtues of capitalism, but for a flaw in it.

          1. When you make something more expensive you get less of it. That is a law of economics. Labor is not exempt.

          2. Re: Tony (no spaces),

            All I know is that there is no hard evidence that shows overall employment rates are significantly affected by minimum wage changes.

            There is hard evidence: The demand for immigrant labor. That doesn’t happen because employers are immoral, if you want to argue that next.

            Your intuition may make you think it does,

            Stop projecting. There’s nothing intuitive about the analysis I made above, it is based entirely on economic analysis.

            We’ve had minimum wage laws in place for a long time,

            So? We also have disease for a long time, that does not mean it is disease that makes us healthy.

            This suggests that employment rates are affected by larger factors.

            Of course it is – that would be all employment. But minimum wage laws do NOT affect overall employment, it only affects marginal employment, e.g. for those just starting to come into the labor market. You conveniently shy away from this fact.

            Being against a minimum wage suggests you believe that there’s no such thing as underpaid workers.

            Because believing that is begging the question, as in: thinking like a stupid person.

            1. Cont’n,

              The virtue of a minimum wage is that it effects a downward redistribution, resulting in the economic benefits I referred to above,

              I just showed you that those “economic benefits” are pure fantasy. You forget the employer’s opportunity cost and his pursue of higher earnings. You just want to believe people act the same regardless of the information the market (or the government) is advertising.

              As for “reducing turnovers”, that is true except it is achieved on the backs of the fired and the unemployed. So much for your moral case for the MW.

              For the purely moral argument–if you’re working full time and doing hard work, you should at least be able to feed yourself.

              If you want to feed yourself you should be more productive. People don’t pay you because you exist, they’re exchanging dollars for labor, and labor is what they want, not your happiness.

              That’s not an argument for the virtues of capitalism, but for a flaw in it.

              It is actually an argument for freedom. MW laws do more to RESTRICT a person’s opportunity than increase it. Besides, that was the whole idea from the beginning, as MW laws were originally pushed by Unions and the Progressives to restrict the access to the labor market for minorities and immigrants.

          3. Tony’s probably right. But instead of firing employees the company just increases the price of their product. The net effect is that the minimum wage means I end up spending more money on less stuff. All so smug assholes like him can pretend they care about the poor and middle class.

            1. He isnt even remotely right.

              1. Of course he’s not. I forgot the sarcasm tag after that first sentence.

            2. Re: DesigNate,

              Tony’s probably right.

              He’s not. He made the Aggregate Demand argument which I showed is total bull; he made the “lower turnover” argument which is nothing more than a fallacious conclusion derived from looking at the “which see”; and he made the moral case, like I mentioned in my blog: Leftists assign a moral value on what is still an economic good, subject to the law of scarcity just like any other good.

              So NO, he’s not right at all. Besides, he’s lying when he is saying that there’s no evidence that MW laws increase unemployment. Dr. Walter Williams and Dr. Thomas Sowell showed the detrimental effects of MW on black workers; an effect that was by design, as a matter of fact.

          4. Tony said:

            Being against a minimum wage suggests you believe that there’s no such thing as underpaid workers.

            Does being against a maximum wage suggest that you think no one’s overpaid? If not, then isn’t your argument kinda silly?

            For the purely moral argument–if you’re working full time and doing hard work, you should at least be able to feed yourself.

            Right, but how do you define this in policy? We can figure out what “full time” means, but what about “hard?” Should it be OK to pay less than mininum wage for easy work?

            Also, it’s not like not hiring/firing people isn’t an option. You’re just pricing people out of the labor market.

            Like Obamacare. Raising the benefit requirements of health insurance companies doesn’t just immediately give everyone better health insurance. For some, it just means cheap options are taken off the table. Case in point.

            Let me put it this way: What’s the difference between raising a minimum wage, and waying that any job for any wage less than the minimum is illegal? None? Well then, this isn’t a law that’s raising people’s wages. It’s a law that’s banning certain jobs. An employer may respond give someone a new job (i.e., modified work with a new wage), or just give them no job at all. But taking people’s options away rarely helps them.

    4. {Some strategy needs be worked out that increases wages}

      What you mean to say is that a strategy needs to be worked out to counter-act the effects of our other interventionist policies, chief among them stagnant wages.

      If you really supported improving living standards, you wouldn’t want to pile on an ad Hoc patchwork of laws and regulations while supporting the existence of a banking cartel at the heart of it all.

    5. Tony said:

      The fact is there is not empirical evidence of a correlation between raising the minimum wage and increasing unemployment rates. While it makes Econ 101 sense that raising the cost of something reduces demand for it, the extra element is that “labor” consists of people who will go on to spend their extra wages in the economy, hopefully contributing to a virtuous cycle of growth and employment.

      Wow, you’re disagreeing with the Nobel prize winning economist, Paul Krugman? I thought doing so meant living with a fact-free philosophy… I guess that depends on the topic?

      (How strange to actually invoke the “Novel prize winning Paul Krugman” in that direction).

      1. Nicely done.

    6. The fact is there is not empirical evidence of a correlation between raising the minimum wage and increasing unemployment rates.

      Bullshit.
      There’s all sorts of emphirical evidence that increases in the minimum wage reduce employment amoung people at minimum wage level.

  13. When did economic reality start matter to politicians? Cash for Clunkers was a direct tax on the poor occuring in the middle of the recession; I saw no outcry from the socialists.

    1. “The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.”

      ? Thomas Sowell

      1. When you guys have to keep referring to the same guy, that’s a good indication that he’s an outlier.

        I realize it’s hard to find economists without an agenda of their own, but there has been a meta-analysis of research on the minimum wage, and there just isn’t hard evidence of a correlation to significant changes in employment rates.

        1. Re: Tony,

          When you guys have to keep referring to the same guy, that’s a good indication that he’s an outlier.

          That’s not an argument. Sowell’s proposition should be judged by its own merit and not because of how many times he is quoted by others. You should know better than that.

          but there has been a meta-analysis of research on the minimum wage, and there just isn’t hard evidence of a correlation to significant changes in employment rates.

          You keep conflating two things, Tony. I am going to use your own words and conclude that this study you keep mentioning is an “outlier.”

          What the MW does is affect marginal employment, that is for those about to enter the market and for those that are at the margins of productivity, i.e. low skill jobs.

          Here’s the analysis from the Huffpo and the explanation why it just “looks” like MW does not affect employment:

          http://www.huffingtonpost.com/…..13136.html

          Here’s a study from the Montana Policy Institute showing the increase in teen unemployment after the increase in the MW.

          Teen Unemployment and the Minimum Wage

          Don’t pretend like it does not exist. When you raise the price of something, the demand for it goes down. That’s economics, that is economic law, unbreakable like the law of gravity and movement.

          1. “Everyone knows that the economic laws are universal for all products, except labor. There is no such thing as labor that is too costly.”

            ~Derp

            1. Government is magic. It can change economic laws with nothing but good intentions.

              Tony believes in magic.

        2. I keep referring to the same quote because it’s the truth.

          No one said that minimum wage has a significant effect on employment rates. That’s a straw man.
          It has a significant effect on employment rates for the young and the unskilled. Once a person acquires skills that make them worth more than the minimum wage, that wage no longer affects them. It’s the people who lack the skills necessary to produce $7.25 worth of value who are marginalized.

          Your reading comprehension is atrocious.

          1. “By virtue of exchange, one man’s prosperity is beneficial to all others.” Bastiat

            Another truth in economics and another one politicians fail to understand. The benefits of one man’s exchange to another is impossible for socialists to understand and yet it is essential to the ladder from poverty.

            My point about Cash for Clunkers still stands, I notice how quickly Socialists withdraw once data is in about another of their failed programs that hurt those they claim to care about. Tony, got anything on why Democrats decided to gauge the poor?

        3. When you guys have to keep referring to the same guy, that’s a good indication that he’s an outlier.

          Or it’s a good indication that you keep repeating the same fallacious arguments.

          1. ^THIS^

            It keeps getting repeated in the hopes that his tiny sockpuppet brain might one day retain the information and apply it to his thinking.

        4. Tony said:

          I realize it’s hard to find economists without an agenda of their own, but there has been a meta-analysis of research on the minimum wage, and there just isn’t hard evidence of a correlation to significant changes in employment rates.

          Wow, how selective can you get with the evidence?

          I assume you don’t think we need more research on the law of supply and demand, correct?

          If so, why is labor a special exception to this rule? Lacking “hard evidence of correlation” in some specifically chosen study usually isn’t a good reason for choosing to ignore well understood economic principles. This is just a case of special pleading: labor is declared a special exception to the law of supply and demand, for unknown reasons, until certain studies come out certain ways. That’s not fact-based logic and reasoning. That’s just dogma, looking for an economist who agrees.

  14. The cleaning lady that raised her price was not used again, but if she included a massage her work would be demanded. On the next job interview state that you will let the boss determine what you are worth.

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    1. Now this guy has the answer!

    2. There are no “gorgeous” Chryslers, but I’m intrigued in your BOTness and would like to subscribe to your newsletter.

      1. The 300 ain’t bad.

        1. It ain’t good either.

          1. I can’t find a way to report the Bots and would like to fight back. I hate their blog space consumption.

    3. I heard about some guy’s mom that made 89,000 last month, working a few hours on the internet at 77 bucks an hour.

  16. When they last raised the minimum wage I saw it’s effect on entry level workers. I was building Taco Bells at the time. When the minimum wag was $ 3.25 they made they’re food on an I-line which used four employees. They raised it to $ 5.00 an hour and they started retrofitting and building stores with what they termed the L-line which only required 2 employees to run. When they raised it to $ 7.25 they went to the U-line which only required 1 employee.

    So what is a better scenario 4 people getting entry level jobs and the experience to move on to better paying jobs or 1 person having that opportunity?
    At what point do companies invest in fully automated systems that completely eliminate the need for entry level employees.

    1. Once upon a time when minimum wage was less then four bucks, McDonalds had one person cooking the meat, another toasting and dressing the buns, and another wrapping the sandwiches and putting them in the bin.

      Now one person toasts a bunch of buns and puts them into a proofer. The same person cooks a bunch of meat and puts it in a steamer. The same person then assembles and wraps the sandwiches, microwaves them, and puts them into the bin.

      1. What a pathetic set of low expectations that socialists think a person should enter and be content at entry level positions in the work force. Give them a ‘living’ wage so they will not aspire and then upset the government apple cart that is suppressing their wages in the first place.

        Comrades, I’ve said too much, I think they are at the door.

      2. Seems like it would be quicker just to skip the middle steps and put everything directly into the bin.

      3. What makes you think corporations would want to decrease efficiency by hiring unnecessary people out of the goodness of their heart, regardless of the wages?

        1. What makes you think corporations will not seek to increase efficiency and automation as a result of being forced to pay their low skilled workers more than they produce?

        2. Maybe because the past can teach us things. Those same companies didn’t get rid of employees because they hate them some efficiency.

          Asshole.

      4. Wow, this whole time I’ve been making burgers all by myself like a loser, which I should have had a team!

  17. It’s really important to remember that the belief that all profit is theft is one of the foundational principles of progressive ideology. Literally, that’s exactly what Marx argues in Das Capital, and that idea completely permeates all thought about the economy on the left half of th spectrum. Profit is “surplus value” that is extracted from workers – by paying them less than what they are producing is worth.

    They honestly don’t think that businesses should be able to turn any profit at all. Ergo any time they see any business turning a profit anywhere, their immediate raction is to think of ways the profits can be consfiscated and used for public services. The liberals want to confiscate them and use them for social welfare, the leftists want to nationalize industries and turn them into non-profits. The goal in both cases is to eliminate all profit from the system, thus making it (in their minds) “fair”.

    1. Money obtained through voluntary transactions (profit) is theft, and money obtained through threat of kidnapping (taxes) is not.

      The liberal mind is an odd place.

      1. They’re just taking the surplus value back, on behalf of the proletariat.

        The key issues that is neglected is risk.

        An employee who gets paid a wage or salary instead of working for himself is exchanging profit for security. Yes, you can get 100% of the profits if you are self-employed. But you also risk getting nothing if the product doesn’t sell.

        The “capitalist” makes a bargain, he takes on the risk and the potential reward, and the employee gets paid a guarenteed paycheck. That’s the contract.

        As with health insurance, leftists in general suffer from a poor understanding of risk. They either don’t think it exists at all (the model of industry in their heads is a static market with unchanging supply demand and thus zero risk), or they try to create a universe where it doesn’t exist (the government redistributes money to correct for bad luck). Maybe that’s partly because a universe governed by random chance is not one that can be planned and controlled like a deterministic machine.

    2. “any time they see any business turning a profit anywhere”

      With the exception of Apple for some mysterious reason.

    3. The economists answer is that there is no such thing as profit.

  18. I doubt raising the minimum wage will have any real effect on the youth. A good chunk of them will borrow tons of money to live 4,8 years in college, or they’ll just chillax with their parents at home. At worst, the minimum wage hike will mean less mall jobs at bath and body works or Subways during summer break. So basically, people who need secondary or supplementary income.

    The real losers are surely older immigrants who dominate the fast food landscape outside of some swanky coffee joints. They’ll have to join the fruit picking business where wage and safety regulations are apparently non existent.

    I just want to go to burger king, push in buttons to order number 5 combo, select the amount of condiments and the “to go” option, and leave the restaurant. I don’t need human interaction in a fast food joint.

    James Cameron ruined this country with his “machines turning on humans” movies. Machines are loyal, legal, and they can programmed to speak Spanish. They’re the perfect solution.

    1. Somewhat factual; some opinion. The service industry in large measure is the value add of human contact over machine labor. I like the BK kiosks, but if I’m calling a company with what I view as a unique issue (the only reason I do call) then I want a human and not a fifty layer automated system. You’re basically making an opinion case against the value of human labor. Perhaps that labor is best moved to other things besides BK counter, but human labor is a core component of exchange principles.

      There are some issues in labor vs machine value covered more applicably earlier in the thread. The equations are thrown off when you have other value add to a human, as in the service industry – over just manufacturing output analysis.

      Regardless, the ignorance lies in the anti-capitalist trying to pile gerrymandering on top of gerrymandering with no ties to credible economic theory, but only a childish play to ‘solving’ a percceived problem.

  19. Supply and demand of course operate, but it isn’t quite simple, because you need to take elasticity into account. I suspect the demand for bread is relatively inelastic: there is a fixed quantity people consume each month and it doesn’t depend much on price. Same for gasoline. For minimum wage labor, it’s not clear what the elasticity is, but you can’t simply argue s’s if it were-1. Both sides need to be more careful in their arguments.

  20. Household purchasing power is suffering, consumption has dropped and people don’t have money. Actually the Orlando Bisegna Index which measures the intensity of the economic crisis worldwide, ranks US 11th place among the countries hardest hit by the economic crisis at 13.18 points (source from http://www.orlandobisegna.org) for the month of February. Hopefully things will get better soon!!

  21. My retarded cousin has kept his job as a car washer for over 9 years. He accepts what little he earns and is able to house and feed himself. If he demanded more the boss would boot him and find another slow learner. There are 40 million like my cousin in the US and they should be left to find their own level of pay.

  22. my neighbor’s step-mother makes $64 hourly on the computer. She has been without work for seven months but last month her pay check was $17761 just working on the computer for a few hours. Read more on this site http://WWW.FLY38.COM

  23. A direct subsidy, like earned income credit, is better than price control on wages, because

    1. Market distortion. Price controls favor firms relying on high-cost labor, and disfavor laborers whose labor is worth less than the min wage. The payment is made outside of the labor market, and isn’t tied to a job but rather total annual income

    2. Transparency. It is hard to determine how much firms may be affected; which jobs have been lost; which laborers benefit. A direct subsidy can be as transparent as the govt wishes, disclosing the amount of such subsidy and where and how it is paid.

    3. Social safety net. A minimum wage is a poor safety net as it does not assure a “living wage”. An earned income credit or direct subsidy allows the government to determine what a household needs, and ensure that they get it.

    4. Social policies should be paid for by society. Whether it’s rent controls or minimum wages, the premise is that ALL of society benefits from the policy. If society as a whole benefits from a living wage, then society as a whole should pay for it rather than force a portion of the population to bear the burden.

    The MARKET is the best tool, but not a perfect tool. Where government intervention is determined to be appropriate, it should be targeted to achieve the policy goal, do as little harm (including to the market) as possible, and be paid for by those that benefit from it. A direct subsidy to low-wage earners beats a minimum wage on all these fronts.

  24. Let’s have some fun, and do something worthwhile too. Back in 1960 Milton Friedman spoke of the harn done to Negroes and particularly Negro youth” by the minimum wage. Now we all know the minimum wage is meant to protect union rates, so let’s address the matter Friedman raised this way. When legislation comes to raise the minimum, let’s attach an amendment stating that it applies only to workers over 20, with a 10% discount for each year down to 15. (15 = 50%; 16 = 60% etc.) Then sound the call loud and clear that we are doing it for “Negroes and Negro youth” (in today’s politically correct terms, of course). Then sit back and watch the MSM, the unions, and the NAACP fight it out. Who knows, the problem Friedman cited 50 years ago just might get addressed. At least we’d get to watch Obama squirm.

  25. Back when I used to hire people, the minimum wage was where you started the entry level workers, usually some HS grad starting their first “real” job.

    Now that the minimum wage is getting up to $9.00 an hour, given the choice, you are going to hire adults. And by adults I mean the 40 year old guy with a wife and three kids on AFCD, because he’s the only worker that lives and dies on “overtime” hours.

    A mature adult is a better choice than a 20 year old young man who only thinks about cars and girls, or comes to work hung over or stoned.

    Also, since we are on the verge of adding 12 million or so new legal workers to the low skilled labor pool, there will be no shortage of qualified minimum wage workers thrilled to get any job and carry very little baggage.

  26. Chukie, would you more likely hire for an entry level position a 16 year old (who interviews as a responsible youth, an important qualifier) at $5.40 an hour or an unemployed adult at $9.00 an hour?

  27. Chapman doesn’t get that the Libertarian position is to raise minimum wages to $30 an hour and shorten the work week by voluntary means such as unions and squeezing taxes and crazy regulations from the system.

  28. “is that while some workers will go from $7.25 an hour to $9 an hour, others will go from $7.25 an hour to zero”

    What many fail to point out is when the minimum wage increases by $1.75, those having worked a year or two proving their worth, and now making $9 … they will find themselves making minimum wage again. They could do 2 things, speak up and try to get a differential raise worthy of those with experience, OR, throttle down their performance to equal new hire’s.

    This would go up the ladder, especially in unions, a demand for comparative raises for all.

    Of course most companies could absorb raises for a few employees (not many make minimum wage right now) But what those companies could not withstand is the blow back from veteran employees that would not and should not stand and watch the inexperienced get a govt. forced raise while they get a pat on the back and “sorry, I got nothing for you, and now it will be a while longer before I do.”

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