To the Journal editor:
I have begun to believe that in order to write opinion pieces for the Institute For Policy Studies, a requirement is no knowledge of economics.
The latest example is an article by Sarah Anderson praising an increase in the minimum wage in which she apparently is oblivious to the fact that the economy has moving parts. One can’t distort the economy in one place without causing a dislocation somewhere else.
I have always believed an increase in the minimum wage is a cruel hoax on the economically illiterate usually by politicians whenever they are in trouble.
Rather than address Ms. Anderson’s nonsense, I will pose the following questions to minimum wage workers: (1) why do you believe you’ll still have a job after an increase? (2) If you make less money than everybody else before and after an increase why do you believe you will be better off? (3) If you make less money than everybody else does the amount you make really matter?
In case (1), the workforce always sheds jobs after an increase. Let’s face it,some jobs are not worth extra money. This is not a reflection on the employee but the job. In case (2), your position on the wage ladder has not changed, only the ladder has. The increase ripples up through the economy and you are right back where you were before.; (at the bottom). For question (3), if the cost of doing a unit of work is redefined say from $7/hr to $10/hr, (or $50/hr) the unit of work hasn’t changed only the value of your money. In the extreme, countries that have gone this route eventually require a bushel basket full of money to buy a loaf of bread; (just before their currency collapses).
A commentator recently described the minimum wage as a transfer of wealth from one group of poor people to another group of poor people to which I would add a war on the least employable.
The good news from a recent Harvard study finds mobility between the wage classes is still robust. In other words the low wage people of today are probably not the low wage people of tomorrow.
My advice is a benign neglect of the minimum wage as inflation reduces its negative barrier on our least employable.