An Examination Of Minimum Wage In The United States

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  • Ian

    A little knowledge can be a dangerous thing.
    Arguing to not increase (in effect to abolish) the minimum wage (MW) because the productivity of relatively unskilled workers cannot justify a raise only serves corporate interests. Don’t think that, as a consumer, the cost savings off the backs of labor will be passed on to you (a small token fraction at most might). Look to the Walmart family as a case in point. A MW keeps a race to the bottom – to enforced poverty – from occurring. Assume an infinite supply of unskilled labor. If no MW wages would drop until the employer can get just enough of the labor, disgruntled as it would be. To keep labor interested in getting hired at such a non-living wage, corporations would work to nibble away at public income supports. Oh wait, they already do! That’s why many MW earners must work more than one job. Over time the inflation-adjusted minimum wage has fallen – a lot. It is disingenuous for the author to suggest that a rise in the MW cannot be justified because the productivity of the unskilled has not kept pace. No labor-intensive job has kept pace precisely because a machine cannot do the work (i.e. the capital-labor ratio stays low so per person output is steady). And that is where the minimum wagers are. If the minimum wage were to be increased, hard working and mostly unlucky people at the lower economic strata would have a better life and, importantly, more money to spend on others’ products. This holds especially for low wage earners – they have no extra money to save. Corporations may have less profit, we all might pay a smidgen more for our hamburger, but do the board room types need another 8-bathroom house? Our spiritual mission is to make peoples’ lives better, not worse as the author advocates, unwittingly I am sure or hope). Attacking the MW is cruel and it is bad economics.