http://online.barrons.com/article/SB50001424053111903506304579383191527602008.html?mod=BOL_hp_mag# The debate over raising the federal minimum wage to $10.10 an hour from the current $7.25 heated up last week with the publication of a Congressional Budget Office study, which estimated that total employment would likely be reduced by "500,000 workers" if the hike were implemented. While the CBO's scenario made sense, a truly substantive debate about the minimum wage would start with the merits of abolishing it altogether, while seeking to help poor people through more direct means. Instead of decreeing that the unskilled can't accept certain low-wage offers, thereby condemning many to joblessness, allow them to consider all of the potential options. But to the extent that low-paid workers are part of poor families—and many are not—help them in other ways. Ironically, Nobel laureate economist Joseph Stiglitz, an advocate of hiking the minimum wage and critic of the CBO report, sensibly opined in his textbook Economics that "the minimum wage is not a good way of trying to deal with problems of poverty." His point: Since many minimum-wage workers aren't poor, this is yet another case of the government trying to solve a problem with a blunt instrument. The same CBO study he criticized bears him out, estimating minimum-wage workers' median family incomes at $30,000, which shows that most live in families well above the poverty line, given that many have multiple workers. BECAUSE ON-THE-JOB TRAINING is the most effective kind, the best way for people to better themselves materially is through working. A National Bureau of Economic Research study, "Minimum Wage Effects in the Longer Run," concluded that the "longer-run effects" of "diminished training and skill acquisition" are "likely more significant" than the harm done by the minimum wage in the short run through reduced employment. Jobs that provide even little or no wage—like unpaid internships—sometimes offer the best on-the-job training. A Wall Street Journal story early last year pointed out that Democratic politicians like Minnesota Sen. Al Franken "advocate...a higher wage floor," except in their congressional offices, where all the internships are unpaid. Franken is quoted as pointing out that "interns will receive unique career development opportunities"—wise words, although honored in the breach when it comes to Franken's support of wage floors for others. Critics will respond that abolition of wage minimums will cause rampant exploitation. All-powerful employers will set the wages of the low-skilled at subsistence, while the prices they charge customers will be as high as ever. However, the critics might be surprised to learn that the share of hourly workers earning the federal minimum wage or less has fallen significantly over the long term. While the inflation-adjusted federal minimum in 1980 was about the same as in 2010, Bureau of Labor Statistics data show that the share of workers at the federal minimum or less has plummeted, from 15.1% in 1980 to 6% by 2010, and to 4.7% by 2012—a trend that tends to belie the idea of employer omnipotence.
This brings up the question of what is the primary purpose of the minimum wage? I think if the minimum wage was set and then raised 2% each year the part about such a dramatic current raise causing unemployment would be moot. In other words, ineffective government has caused this dilemma.
To sum it up: micromanaging contracts between employer and employee is ham handed blunt instrument way of addressing a perceived problem. The problem isn't people not being paid enough, it's that some people need assistance. We already have a gazillion programs at fed, state, and local levels to address providing assistance. In the progressive world, it's better to spend $20K, per recipient, of taxpayer money on welfare programs when you could write those recipients a check for $10K and they wouldn't be poor anymore.
The minimum wage has been raised numerous times over my lifetime. Each time this same ridiculous drivel from the 1% floods the (their) media. Each time it proves to be nothing but an absurd and desperate lie.
So your argument is that we don't need child labor laws because most employers would choose not to employ children? ok. barfo
I'm guessing, but there are probably hundreds of thousands, if not more, people directly/indirectly employed to administer those social programs. Pay people direct and now you have more unemployed. And now they have to be paid for their disposition.
The uber liberal Washington Post opines: http://www.washingtonpost.com/opini...47e41a-9b1d-11e3-9080-5d1d87a6d793_story.html The great virtue of the Congressional Budget Office’s recent report on the minimum wage is that it injects a much-needed dose of reality into the debate over job creation. The Obama administration and its congressional allies have taken the position that raising the minimum wage almost 40 percent would have little, if any, adverse effect on jobs. The CBO rejects this view as unlikely. The gap between the administration’s claim and plausible outcomes reveals larger inconsistencies in the White House’s boast that job creation is a top economic priority. Under the proposal, the federal minimum wage would go from today’s $7.25 to $10.10 by 2016 in three annual steps. Conservatives have argued that this would kill jobs — if government boosts the cost of labor, employers will buy less of it — while doing little to reduce poverty. By and large, the CBO report supports this critique. Here are its main conclusions: ● The higher minimum wage would reduce jobs by about 500,000, or 0.3 percent of projected 2016 employment. The CBO admits that its estimates involve much uncertainty. Job loss, it says, might be as high as 1 million or as low as almost nothing. The half-million figure is its best judgment. ● Up to 25 million workers would receive wage increases, about 16.5 million below the proposed minimum and possibly 8 million more just above it. Wage increases would raise the incomes of families in poverty by about 3 percent, or $300 annually. The effect is muted because most people in poverty don’t have jobs and many low-income workers are part-time (47 percent). ●Higher incomes would lift about 900,000 people above the government’s poverty line in 2016 ($24,100 for a family of four). That’s about 2 percent of the projected 45 million poor. The small impact also reflects the fact that many low-income workers, presumably young, come from middle-class families, including 33 percent from families with incomes exceeding three times the poverty line. An administration serious about job creation has to sacrifice other priorities to achieve it. This, President Obama hasn’t done.
The argument is that minimum wage is the wrong means to the end you would aspire to. What is the point of raising the minimum wage? If it causes 500,000 jobs to be lost, you're putting the burden on welfare for 109% of those peoples' needs. Not the right outcome. The right outcome is to supplement the income of the fraction of workers making minimum wage that are actually needy. It wouldn't cost as much and 500,000 people wouldn't lose their jobs. In fact, more people would be hired, lessening the burden on welfare programs.
If you think the WP is liberal, you must be a neo-nazi. It's just another 1%er propaganda tool, and rarely takes the side of the common man.
How about the govt. just write them the $10K checks? Writing checks is actually one of few things government is good at!
Yeah, I suppose. It could be pinned to a one or two year average. It seems like a good thing if the economy is going down, that wages can go down as well. Maybe that could cause a downward spiral.
Ok, now show me the actual proposal to do that. Oh, you don't have one? So basically you are arguing that we should get rid of the minimum wage because it isn't perfect, but let's not worry about replacing it with anything better. The usual disingenuous libertarian position. barfo
You're proposing to change a system to another arbitrary level without even knowing if the system should exist at all.
