Sunday, September 09, 2012
I just read an article this evening that mentioned that Congress is again talking about increasing the minimum wage, in increments, until it reaches somewhere in the neighborhood of $9.80 and hour. To lots of folks making minimum wage that sounds really great. However, think what it will do to many business owners who are operating on a marginal basis at this point. Many of them will be forced to go out of business because they can no longer pay the wages necessary to stay in business. Others who are not marginal but are still having to struggle will end up laying off people because they cannot afford to pay this increase. So their work will have to be absorbed by people that are already working at their own jobs who will not be thrilled at having to "double up" and do someone else's work along with their own. Everybody today expects to get more and pay less and mostly that won't happen. You can only squeeze the turnip so much until their ain't no juice left there. I remember, in this context, listening to Milton Friedman, years ago now when the minimum wage was $2.25 an hour. It had just been raised and he was skeptical of that. He asked the question, and I think it was a good one--why is an entry level black student better off unemployed at $2.25 an hour than he was employed at $2.00 per hour? He had a good point and I have yet to hear anyone answer his question. Raising the minimum wage yet again will only result in lots of marginal workers losing their jobs because their employers just can't afford to pay that much to all the people that work for them and so some will have to go. But the Congresscritters, trying to make points back home with the electorate don;'t have to worry too much about that. Their retirement is already secure and you can bet they will get lots more than the folks on Social Security So, is this a "concern for the poor" or just another vote-getter?