Raise the minimum wage

The debate about whether minimum wage helps the working poor by giving them more money or hurt them by pricing them out of the job market continues, as does the debate about its general effects on growth and employment. Fortunately, we can test it out. Various jurisdictions are enacting different minimum wages. Let’s see how it works.

Louis Brandeis called the states the laboratories of democracy. We can test policies in limited places. Those that work spread to other places; those that fail are locally contained and die out. Very often, all the analysis in the world cannot determine the usefulness of a particular policy as well as a real world example. The great thing about being practical is that you don't have to know everything in order to know what to do.

So let's do it. Let some states and localities enact minimum wages. If it works out, qualified workers will flock to such places, improving productivity and making it worthwhile. Pay is often not the determiner for success in firms. "Cheap" labor is often not worth it if the labor is cheap because it is not very good. If better wages improve labor, it is worth the price. Presumably, in places near borders, all the good workers will be attracted to the higher wage side. They will displace the bad workers who will go to the lower wage side and we will see what happens.

There are other possibilities. When I was a young worked at McDonald's. One of my tasks was to fill soft drinks. The boss told me that the cost of the labor and the cup was greater than the cost of the Coke. They let you fill your own cup at most fast food places today. They are not being generous. They just figure that the Coke cost less than the labor. Lots of labor can be eliminated. ATMs eliminated thousands of teller jobs. A worker competes not only with other workers but with processes and machines. Higher costs labor means more machines and changed processes.

And some things need not be done at all. My personal hatred is aimed at leaf blowers. If nobody blows the leaves, it probably doesn't hurt most of the time. I hope that labor becomes expensive enough to eliminate those guys.

Few people really make minimum wage very long. I worked for minimum wage for short times, but even as a young and unskilled worker at McDonald's, I got a raise after a couple months.

Anyway, give it a try and see what happens. Just let's be sure that we don't do it everywhere at once. The laboratories of democracy require variation and selection.

Posted by Christine & John at December 11, 2013 6:00 PM
Comments
Comment #374977

C&J, we tried that with healthcare and then took the worse situation in the country (Massachusetts) and expanded it nationwide… I’m not sure that Americans are good at ‘getting the point’ in this area.

Posted by: Rhinehold at December 12, 2013 9:26 PM
Comment #374978

Some good ole centrist common sense. But, sorry C&J, in a corpocracy the solution must always adhere to the bottom line. Therefore, changing the minimum wage would beget a struggle that the working folks will loose, IMO.

Rational being that if raising the minwage worked folks might want to try it again in a couple of years, and so on - - -

Otherwise - - -

Posted by: Roy Ellis at December 12, 2013 9:50 PM
Comment #374986

C&J,

The “experiment” has already happened in a number of states. The results are the subject of a raging debate within the social/economic scientific community. http://en.wikipedia.org/wiki/Minimum_wage

An interesting alternative from the libertarian perspective. http://reason.com/archives/2013/11/26/scrap-the-welfare-state-give-people-free

Posted by: Rich at December 13, 2013 8:07 AM
Comment #374993

Minimum wages have increase steadily since their inception. Roosevelt started the minimum wage at .25 an hour and it has grown to the current rate of over 7.00 now.

This demonstrates the insanity of a minimum wage. The minimum wage does not address the underlying problem of inflation and fiat currency. To raise the minimum wage, to go thru the procedure of debate, legislation, enforcement, every few years is just insane. It doesn’t solve the problem.

To actually solve the problem we would have to address the actual problem. If the Federal Reserve Act was not passed our currency would not be born in debt. A penny would be worth a penny, not a penny minus the interest owed to the Fed. Given the advancement in productivity and innovation, creating cheaper ways to produce products our money should steadily increase it’s purchasing power, not decrease as with inflation. Inovation and productivity increases would reduce the need for an ever increasing minimum wage and it’s political drama every few years.

Stop the insanity. End the Fed.

Posted by: Weary Willie at December 13, 2013 10:38 AM
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