There’s been some rumblings recently about raising the minimum wage to somewhere around 10 bucks an hour. Not surprisingly, I don’t like the idea. Low or no skilled workers could find themselves priced out of the market. I have been heartened to hear that people are actually addressing the standard economist complaint about wage floors, that they create unemployment. Sadly, the specter of higher unemployment is, as usual, being dismissed. There is even a couple of papers that people are pointing to that show that a higher minimum wage actually creates more jobs. That’s fine, just ignore the hundreds of papers that argue the opposite. Let’s try this, if raising the minimum wage laws creates more jobs, then let’s raise it to $85 an hour. That’ll make everyone quite a bit richer and employment will rise too! It’s funny how everyone can see the problems with a really high mandatory wage but choose to ignore it when we talk about smaller amounts. Folks, there has got to be consequences to raising wages whether we are talking $85 an hour or $10. There can’t be any debate about that, what can be argued is the impact it has on both the overall economy and particularly the low skill workers. Here’s the kicker, the low skill worker, the one on the margin of being employed or not, will feel the effects of this law much more than the 98% of the workers that currently make more than the minimum wage. If he is barely employable at 5 bucks an hour (think ex-cons, high school dropouts, and mentally challenged people) , he will have real trouble finding a job at 10. If you really want to help the people at the margins of society, allow them to work for whatever they can, as they acquire experience and skills, they can demand more money. Pricing people out of the labor market dooms them.
Isaac
Isaac