Minimum wage: 10 things you should know
Not only is raising the minimum wage economic poison, it harms the very people it purports to help
Liberalism, which is intellectually prosaic and bereft of new ideas, can do no better than to recycle failed policies from three-quarters of a century ago such as increasing the minimum wage. This is yet another liberal leitmotif that has been thoroughly discredited; nevertheless, President Obama trotted it out once again during his State of the Union address. This is a fitting time for this topic as May Day traditionally is a focal point for issues involving workers' rights.
It is unbelievable that something so thoroughly in disrepute and anti-empirical is being foisted on the American people yet again. Not only is raising the minimum wage economic poison, it harms the very people it purports to help, i.e. the young, the poor, minorities and those with low skills. Following are 10 things you should know about the minimum wage.
1. Economists are unanimous that minimum wage laws are harmful. Even progressive economists are of the same mind that such laws hurt workers. Advocates of a higher minimum wage are like witch doctors who reject science in favor of rank superstition.
2. It is a fundamental economic tenet that when the price of anything goes up, people buy less of it. When the cost of labour is raised artificially, there will be fewer workers. School children with lemonade stands know this – when they are not being harassed by liberals.
3. The minimum wage affects less than 1 percent of all workers. Moreover, most workers earning the minimum wage do so for only six months or less before receiving raises. Virtually no heads of households or full time workers work at the minimum wage.
4. The average household income for a family with someone earning the minimum wage is nearly $50,000. Most workers earning the minimum wage aren't poor; they are spouses or teenagers living at home like the kid who delivers pizza to buy gas for his BMW.
5. Labour unions favour the minimum wage for their own cynical and diabolic reasons. It prices the poor and minorities out of the labor market and reduces competition for lower-paying jobs. Many union contracts contain provisions linking minimum wage changes to increased benefits and to reopening contracts. The average union worker earns $25/hour.
6. Higher minimum wages are a death-knell for the poor and minorities. The last time the minimum wage increased in 2009, 300,000 poor and minority workers lost their jobs within a few months of the increase and as a direct consequence of the increase.
7. The minimum wage already is above the $9.00/hour Obama proposed as a result of the earned income tax credit. Counting EITC, many minimum wage workers earn $10.50 per hour. Raising the minimum wage reduces the EITC and creates disincentives for work.
8. A majority of those in poverty don't work; they need jobs not a higher minimum wage. They can't find jobs because our economy is stagnating due to vapid liberal policies.
9. A higher minimum wage creates unemployment by imposing a wage floor that prices cheap labor out of the market disproportionately harming the young and minorities.
10. Those receiving welfare and unemployment do not benefit from a higher minimum wage and have no incentive to work as full time work with a minimum wage is not attractive.
President Obama's proposal for a higher minimum wage fails Economics 101 and is what one would expect from a witch doctor. It is bad for everyone especially the poor, young, minorities and those with low skills. So, why did he propose it? The labor unions want it for reasons noted in #5 supra. And he can count on the state sycophant media not to question it.
Finally, Obama knows he can count on liberal support because it appears compassionate; they simply block out of their minds the serious harm they are wreaking on the poorest among us. Just as with all the other warm, fuzzy, feel-good bromides, it enables liberals to retreat back into their plastic bubble once again congratulating themselves on their pristine intentions.
At the end of the day, however, it all is a lie because liberalism is a lie.
George Noga is a certified public account and the Chairman of the More Liberty, Less Government Foundation. He serves as the co-Chair for the Central Florida Centre Right Coalition
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