…of the minimum wage:
Several years ago, the city council of Santa Monica, Calif., decided to make the town a workers’ paradise by passing a union-backed law requiring everyone to be paid at least $12.25 an hour.
At the time, restaurant owner Jeff King complained to me that that law would “dry up the entry-level jobs for just the people they’re trying to help.”
He was right. It’s why gas stations no longer hire teenagers to wash your windshield. Wage minimums tell employers: “Don’t give a beginner a chance.”
Such losses are hard to see, but they are widespread. One company closes because it can’t afford to pay higher wages. Another decides to produce its product with fewer workers, and another never expands. Perhaps most importantly, there’s the business that never opens. The people who were never hired don’t complain—they wouldn’t know whom to blame—they don’t even know that they were harmed. They are the unseen victims.
And many of them are black, and the people that the economic ignorami, including the African-American one in the White House, falsely purport to be helping.
If you keep them beggars, they are easier to please… and more readily available to work as political campaign “workers”.
What better way to retain political power by re-enslaving the very people one claims to be liberating?
Democrats — racist (policy outcomes, through “disparate impact” [not MY definition of racism]) in the 19th century, the 20th century, and now the 21st.
A similar issue is the series of disincentives to expand the workforce because of bureaucratic rubbish that expands as your staff gets bigger.
One example from the UK: At the moment, any establishment with five or more staff (including the owner or partners if they work in the business) has to formally offer its staff a company pension scheme. I currently have three staff, and work in the business myself; which means that if trade gets better and I need more workers I have to spend silly amounts of time and money on this sort of bureaucratic rubbish.
Many businesses in California with < 50 employees, IIRC, are going to great trouble to keep that way. Why? Because there would be a net loss of profit because of the extra red tape costs for going over 49, should they do so.
Unlike global warming, the effect of minimum wage is beyond debate.
So WTF??? Really. Everyone that proposes a minimum wage should have no credibility and be ridiculed without mercy. There is no valid argument for a minimum wage. None. It’s time the media did their job every time someone tries to make one. I’m not holding my breath.
I hate to do this, because I am passionately against the minimum wage, but while there are economic ideas that are proven know to be hurtful by both ends of the political spectrum (like, I think, rent control laws), there does seem to be debate about minimum wages. The problem comes that you can’t really prove that it raises unemployment, since unemployment statistics measure the percentage of people unemployed who are looking for work. When people are denied access to the work force by minimum wage, they tend to stop looking for work, or work under-the-table in criminal activity or in cash, so they don’t show up as “unemployed” and the unemployment rate doesn’t move like you’d expect. There is a thought that more people get a wage hike than lose their job. This could happen because the employer can’t get the work done with fewer people and takes a hit in profit (or while arranging for a machine to replace some of the workers). It is an open question whether there’s a “net benefit”, empirically.
The unions do it to protect themselves against non-union workers, obviously. The debate is in policy-making.
there does seem to be debate about minimum wages
Yep. The debate is either ignorant or dishonest; thus beyond debate for the honest and knowledgeable.
The problem comes that you can’t really prove that it raises unemployment
Sure you can. If the rate is below what the employer would pay anyway, it has no effect. If the rate is above, the employer has less money for wages. The statistics are irrelevant.
They are useful for discovering who the liars are.