Thursday, February 01, 2007

More on the Minimum Wage

On Free Exchange, the blog for The Economist, there is a post that does a good job of summarizing the main issues with the minimum wage. A couple of excerpts:

It is probable that the minimum wage increase will not cost enough jobs to make its effects readily distinguishable from random economic variation...
On the other hand, it also seems probable that much of any benefit that goes to poor families will come out of the pockets of other poor people—very probably even poorer people, such as convicts, who are currently barely hanging onto the fringes of the labour force...
CEO's who support higher minimum wages are not, as the media often casts them, renegade heros speaking truth to power because their inner moral voice bids them be silent no more. They are by and large, like Mr Sinegal, the heads of companies that pay well above the minimum wage. Forcing up the labour costs of their competitors, while simultaneously collecting good PR for "daring" to support a higher minimum, is a terrific business move...

4 comments:

Anonymous said...

Not only will an increase in minimum wage make it harder to get a job but it will also provide little benfit for most poor people. A large portion of people who receive minimum wage are teenagers, not middleaged people trying to support a family. The support that these business men give to minimum wage is really good for them, because it hurts their competetitors without hurting their own companies. This could force some companies who are barely making enough to stay in business out of the industry giving the company who is not affected by the wage increase more control over the industry.

Taylor said...

This increase in minimum wage would help the people that are actually still hired after the wage increase, but their employers would be drastically hurt by this change. Many employers would have to cut their work force drastically if the minimum wage was raised from the before $5.15 to the projected amount of $7.25. This increase in minimum wage would greatly increase the unemployment of the United States. THe whole idea of raising the minimum wage is to increase the well being of poor american families, but it is actually going to make many people and families struggle to survive.

Anonymous said...

This article really shocks me. The concept of CEO's who support higher minimum wages just to weed out competition is so snide, yet incredibly clever at the same time. It seems as it it seems to be a little bit of monopolistic behavior. However, I agree with a minimum wage increase. It would highly benefit those who are trying to dig themselves out of a poor living situation. Living off of minimum wage is a very difficult lifestyle. Also, the large companies which are trying to raise this wage are using brilliant business tactics. Therefore, shouldn't they be rewarded?
-Veronica

Anonymous said...

so far, everyone seems pretty down on the increased minimum wage. However, most of the people that are going to either get layed off or not hired because of the new minimum wage are teenagers. teenagers (for the most part) don't truly need the jobs (atleast not likely adults trying to support a family do). I don't think the new minimum wage will cause the kind of hardship the other blog posts talk about. The adults that (for the most part) will keep their jobs will benefit from the higher wages, and hopefully the teenagers will not suffer too much.
-jacob Hormes