Why raising the minimum wage is a mistake

George Will:
Raising the minimum won’t help the economy — it’ll make it worse

“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% unemployment rate is too low. (It would be 10.9% 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% 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%), and especially African-American teenage unemployment (35.8%), is too low. Approximately 24% 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% 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.
There is more.

Will makes a compelling case for not raising the minimum wage.  I think doing so will make it much harder for minority young people to enter the work force and get the experience they need to qualify for better jobs.


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