Minimum Wage
The WSJ argues that raising the minimum wage is a bad idea.
posted by provoce @ 5:10 PM
2 comments
Provo-ciferous
Vociferous: adjective, marked by or given to vehement insistent outcry
Vociferous: adjective, marked by or given to vehement insistent outcry
The WSJ argues that raising the minimum wage is a bad idea.
posted by provoce @ 5:10 PM
2 comments
2 Comments:
As an entrepreneur, I can tell you that the grocery store example rings true. In real life business decisions, when you're trying to make a business profitable (or more so) there are traditionally two ways to do it: a) increase sales and b) cut costs.
Budgets are so closely scrutinized that when it's time to cut, you look at everything. And if those jobs are more of a cost center than a profit center...they'll be the first to go.
So then what happens to that base of 2% (as WSJ quotes) of all workers at the min wage? Does that drop to 1%, but raise the unemployment rate? If we're then supporting those unemployed folks...where's the money going to come from to fix health care?
Great points both of you. Thanks for entering the dialogue.
Queso, although I agree with you, I guess you could make the argument that since we support some of those being paid minimum wage to a lesser degree anyways (because those who are not still dependents and who are living in poverty would be entitled to govt benefits), then some of that new support for unemployed folks will be offset by the increase earnings in the other group. Did that make sense? However, as a societal norm I think it is bad to take steps that will foster unemployment in any way. Those who are employed, even in minimum wage jobs, are less likely to commit crime and to be welfare 'addicts' as they grow older. I wish I had some #s to back up that assertion, but I don't - it's just an educated guess. But don't min-wage jobs typically just serve as springboards to better paying jobs?
B-B, I see where you're coming from with the idea that by raising the wage, employers will shift hours to older workers, and we shouldn't be too concerned with the 16-year olds. My concern with that argument though, is that there is no guarantee that a grocer (or anyone else) would behave in that manner. I'm trying to think of why a grocery store would prefer one group over the other. That would be interesting to find out. Also, I'm a little confused by your reference to Burger King - I know they generally pay more than minimum wage, so wouldn't there be as much incentive for a 35 year old bagger to move over to Burger King as a 16 year old? (Not to mention similar if not greater potential for upward mobility?)
"Minimum-wage jobs also tend to have higher turnover." Personally, I'd be interested in hearing just what the turnover rates for minimum-wage earners are. And here's why: If the minimum wage is simply a stopgap to "grease the wheels" of finding new employment, then it serves a greater purpose of being a sort of halfway-house for the unemployed young to find new jobs.
This situation seems analagous to the corporate income tax to me. Both are ostensibly politically popular and fair, why shouldn't we make the bloodsucking corporations pay more taxes? However, when you hike corporate income taxes, almost without fail one of two things happens in the long-term: a) the corporation reduces costs by cutting employment or b)consumers pay more. The one thing that NEVER happens (again, in the long-term) is that the corporation actually PAYS the tax. To me, a similar dynamic is taking place here. Minimum-wage employers will do one of the two things, and the more likely is the first. The question then becomes, are we willing to accept higher unemployment in return for a better wage for the portion that remain employed. I'm not convinced it's worth it.
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