Raising The Minimum Wage Is a Job Killer
Posted by Larry Doyle on February 13, 2013 9:56 AM |
I would like to think that I have a heart and detest the fact that there are millions of people living in poverty in our nation. This said, basic economics is less a function of what is one’s heart than what is in one’s head.
The number of people living in poverty in America is now approaching a 50 year high. That fact is certainly regrettable but President Obama’s call to increase the minimum wage is not the answer to this problem.
I am sure that many people with big hearts would think that if only those greedy companies raised the minimum wage to a somewhat respectable level, that some of this poverty might be alleviated.
Simplistic thinking of that sort might sound good in a State of the Union address but it would certainly not pass muster in any legitimate Principles of Economics 101 seminars.
Let’s go to class and listen to renowned economist Milton Friedman who lays out the basics of minimum wage economics in less than 4 minutes:
Political pandering may work in Washington but ignorance is no excuse for putting forth proposals that have been refuted for decades. Instead of raising the minimum wage what we need to raise are workers’ skills so that they are more in demand thus driving up their wages. Education is the key. Our nation’s ~50% urban graduation rate is the real problem.
Any questions? Otherwise class is dismissed.
Remember to navigate accordingly.
I have no business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.