The Right Minimum Wage: $0.00…An increase in the minimum wage…would restore the purchasing power of bottom-tier wages. It would also permit a minimum-wage breadwinner to earn almost enough to keep a family of three above the official poverty line. There are catches, however. It would increase employers’ incentives to evade the law, expanding the underground economy. More important, it would increase unemployment: Raise the legal minimum price of labor above the productivity of the least skilled workers and fewer will be hired. If a higher minimum means fewer jobs, why does it remain on the agenda of some liberals?
The minimum wage is specifically intended to take aim at the inherent imbalance in power between employers and low-wage workers that can push wages down to poverty levels. An appropriate wage floor set by Congress effectively substitutes for the bargaining power that low-wage workers lack. When low-end wages rise, poverty and inequality are reduced. But that doesn’t mean the minimum wage is a government program to provide welfare, as critics sometimes imply in an attempt to link it to unpopular policies. An hourly minimum of $10.10, for example, as Democrats have proposed, would reduce the number of people living in poverty by 4.6 million, according to widely accepted research, without requiring the government to tax, borrow or spend. IS THERE AN ALTERNATIVE? No.
We observe that over the last 30 years, the government-university-media complex has become virtually disconnected from many of the facts that harsh human history teaches. Our guess is that there’s all manners of reckoning coming pretty soon. HT: PL