Raise Minimum Wage? It's Iffy

“It’s not true that life is one damn thing after another – it’s one damn thing over and over.” – Edna St. Vincent Millay

Liberals’ love of recycling extends to their ideas, one of which illustrates the miniaturization of Barack Obama’s presidency. He fervently favors a minor measure that would have mostly small, mostly injurious effects on a small number of people. Nevertheless, raising the minimum hourly wage for the 23rd time since 1938, from today’s $7.25 to $10.10, is a nifty idea, if:

If government is good at setting prices. Government – subsidizer of Solyndra, operator of the ethanol program, creator of HealthCare.gov – uses minimum wage laws to set the price for the labor of workers who are apt to add only small value to the economy.

If you think government should prevent two consenting parties – an employer and a worker – from agreeing to an hourly wage that government disapproves.

If you think today’s 7 percent unemployment rate is too low. (It would be 10.9 percent if the workforce participation rate were as high as it was when Obama was first inaugurated; since then, millions of discouraged workers have stopped searching for jobs.) Because less than 3 percent of the workforce earns the minimum wage, increasing it will not greatly increase unemployment. Still, raising the price of low-productivity workers will somewhat reduce demand for them.

If you reject that last sentence. If you do, name other goods or services for which you think demand is inelastic when their prices increase.

If you think teenage (16-19) unemployment (20.8 percent), and especially African-American teenage unemployment (35.8 percent), is too low. Approximately 24 percent of minimum wage workers are teenagers.

If you think government policy should encourage automation of the ordering and preparation of food to replace workers in the restaurant industry, which employs 43.8 percent of minimum wage workers.

If you think it is irrelevant that most minimum wage earners are not poor. Most minimum wage workers are not heads of households. More than half are students or other young, usually part-time workers in families whose average income is $53,000 a year, which is $2,000 more than the average household income.

If you do not care that there are more poor people whose poverty derives from being unemployed than from poor wages. True, some of the working poor earn so little they are eligible for welfare. But an increase in the minimum wage will cause some of these to become unemployed and on welfare.

If you do not mind a minimum wage increase having a regressive cost-benefit distribution. It would jeopardize marginal workers to benefit organized labor, which supports a higher minimum in the hope that this will raise the general wage floor, thereby strengthening unions’ negotiating positions.

If you think it is irrelevant that nearly two-thirds of minimum wage workers get a raise in their first year.

If you think a higher minimum wage, rather than a strengthened Earned Income Tax Credit, is the most efficient way to give money to the working poor.

If you think tweaking the minimum wage is a serious promotion of equality by an administration during which 95 percent of real income growth has accrued to the top 1 percent.

If you think forcing employers to spend X dollars more than necessary to employ labor for entry-level jobs will stimulate the economy. If you believe this, you must think the workers receiving the extra dollars will put the money to more stimulative uses than their employers would have. If so, why not a minimum wage of $50.50 rather than the $10.10? Because this might discourage hiring? What makes you sure you know the threshold where job destruction begins?

If you think the high school dropout rate is too low. In 1994, Congress decreed that by 2000 the graduation rate would be “at least” 90 percent. In 2010 it was 78.2 percent. Increasing the minimum wage would increase the incentive to leave school early. One scholarly study concluded that in states where students may leave school before 18, increases in the minimum wage caused teenage school enrollment to decline.

If the milk of human kindness flows by the quart in your veins, so you should also want to raise the minimum street charity: Take moral grandstanding oblivious of consequences to a new level by requiring anyone who gives money to panhandlers to give a minimum of $10. Beggars may not benefit, but you will admire yourself.

The Patriot Post® · Raise Minimum Wage? It's Iffy