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Monday, March 07, 2005

Misleading On Minimum Wage

The Illusions of the Minimum Wage

By Steve Chapman
Real Clear Politics

Asking Democrats if they favor an increase in the minimum wage is like asking Martha Stewart if she'd mind sharing some decorating ideas. There are few things they'd rather do, and Ted Kennedy thinks it is high time.

The Massachusetts Democrat is offering a measure that would boost the wage floor from $5.15 to $7.25 an hour over the next two years. He noted that it has not been lifted in eight years, during which time senators have gotten seven pay raises. "If the Senate is serious about an anti-poverty agenda," he said, "let's start by raising the minimum wage." Republicans, meanwhile, might accept an increase of $1.10, as proposed by Sen. Rick Santorum of Pennsylvania.

It may seem like an inescapable truth that if you increase the amount employers pay their lowest-wage workers, you will have fewer poor people. Money, after all, is what they lack, and a higher minimum wage means more money to those in the worst-paying jobs.

In fact, this is one of those obvious facts that turns out not to be a fact at all. The available evidence suggests that raising the minimum wage doesn't do what it's supposed to do.

How can that be? Although you can force employers to pay their workers more, you can't force them to employ people. If you raise the tax on cigarettes by $2.10 a pack, people will smoke fewer cigarettes. The minimum wage functions as a tax on hiring low-wage workers -- which means companies will look for ways to do without some of them.
Just like every Democrat idea in existence, raising the minimum wage a whopping two bucks sounds good in theory, but that's about the only time it sounds good. If someone honestly thinks a company will be able to hire just as many people as they would've normally when forced to pay every worker an extra two bucks (because that's what happens when you raise the bottom income level, you end up needing to give a raise to everyone), they're living in what Rush would call Rio Linda. It sounds nice in theory to pay those who make minimum wage two dollars extra an hour, but it starts to lose it's appeal when you lose your job because your boss couldn't afford paying everyone the new increased pay rates.


 
conservativerebel.blogspot.com: Misleading On Minimum Wage <body>

conservativerebel.blogspot.com

Monday, March 07, 2005

Misleading On Minimum Wage

The Illusions of the Minimum Wage

By Steve Chapman
Real Clear Politics

Asking Democrats if they favor an increase in the minimum wage is like asking Martha Stewart if she'd mind sharing some decorating ideas. There are few things they'd rather do, and Ted Kennedy thinks it is high time.

The Massachusetts Democrat is offering a measure that would boost the wage floor from $5.15 to $7.25 an hour over the next two years. He noted that it has not been lifted in eight years, during which time senators have gotten seven pay raises. "If the Senate is serious about an anti-poverty agenda," he said, "let's start by raising the minimum wage." Republicans, meanwhile, might accept an increase of $1.10, as proposed by Sen. Rick Santorum of Pennsylvania.

It may seem like an inescapable truth that if you increase the amount employers pay their lowest-wage workers, you will have fewer poor people. Money, after all, is what they lack, and a higher minimum wage means more money to those in the worst-paying jobs.

In fact, this is one of those obvious facts that turns out not to be a fact at all. The available evidence suggests that raising the minimum wage doesn't do what it's supposed to do.

How can that be? Although you can force employers to pay their workers more, you can't force them to employ people. If you raise the tax on cigarettes by $2.10 a pack, people will smoke fewer cigarettes. The minimum wage functions as a tax on hiring low-wage workers -- which means companies will look for ways to do without some of them.
Just like every Democrat idea in existence, raising the minimum wage a whopping two bucks sounds good in theory, but that's about the only time it sounds good. If someone honestly thinks a company will be able to hire just as many people as they would've normally when forced to pay every worker an extra two bucks (because that's what happens when you raise the bottom income level, you end up needing to give a raise to everyone), they're living in what Rush would call Rio Linda. It sounds nice in theory to pay those who make minimum wage two dollars extra an hour, but it starts to lose it's appeal when you lose your job because your boss couldn't afford paying everyone the new increased pay rates.