Thursday, January 30, 2014

The Truth About the Minimum Wage


One would have thought by now that in a country as advanced as the United States, a debate about the merits of minimum wage laws would be unnecessary.  Anyone who has a rudimentary knowledge of economics knows that if you increase the cost (price) of something, you tend to get less of it.  Therefore, if the goal is to lessen the availability of lower paying, low skilled jobs then mandating that the provider of such jobs increase the wage (cost) that it must pay to employees in those positions could be considered a sure-fire way of lessening their availability.  

It is a shame that the recent politicizing of this issue has caused it to become considered a viable option for improving economic growth.  However, given that there are those who apparently believe that increasing unemployment benefits are also acceptable methods of fostering economic growth, perhaps we should not be surprised that views on the minimum wage are surfacing in the manner that they are!

Fortunately, there are still voices of reason and truth out there who are able to put the nonsense in its proper place.  Economist Scott Grannis in his Calafia Beach Pundit blog, offers some excellent data on the reality of the minimum wage in this country.  The "money" statement from Scott regarding the minimum wage is "....Raising the minimum wage would therefore benefit only 1-2% of the population, but it would probably make life miserable for young and inexperienced workers, who could find that the jobs available to them have vanished because the minimum wage has been set at a level which exceeds their productivity."  We completely agree.  Kudos to Mr. Grannis!