I remember back in the distant past, like yesterday, that the problem was that no one could live on minimum wage. The wage needed to be higher because people desperately needed more money.
But suddenly that has all reversed. According to CNS News:
Raising the minimum wage to $10.10 by 2016 will help “people who just want to work hard,” but it also will help those who want to “work less,” White House economic adviser Gene Sperling told MSNBC’s “Morning Joe” on Wednesday.
He argued that Americans support raising the minimum wage because it will lift “struggling” families out of poverty:
“But they also know what it’s like to see a friend, a neighbor, where one spouse goes back to work, who would prefer maybe not to work. Maybe they’re working part-time just to supplement the family’s income. And they think, if that family member is making that sacrifice — spending less time with the child — then they should be making a decent living or be able to work less because they’re getting a decent wage.”
Notice he is using both arguments. On the one hand these people are “struggling” and need more money… On the other hand they are already making money but they just hate having to work so many hours.
Those are completely incompatible claims. If people can’t live on minimum wage then they obviously can’t scale back on their working for a measly $10.10 per hour.
What blows my mind is that Sperling casually makes statements that show he knows that most of these households are not even poor. He knows in many cases they are “working part-time just to supplement the family’s income.” He actually acknowledges the point that Bill Gates has made, and yet uses it as if it is an argument for raising the minimum wage. Are we trying to help the poor, or are we trying to allow teenagers with parent-provided bed and board to buy more computer games?
Given the quality of the argumentation and the fantasy-world-level of the claims being made on its behalf, I am ready to say that Liberalism has finally lost its mind. They just can’t give up the idea that there is some magic power in government to create prosperity by decree. If only those evil Republicans would get out of the way and let us embody our good intentions in legislation then the world would be made new.
What happens to this nation in the near future is largely a question of whether Americans prefer escapism to reality.
But just to state the obvious again, using law to mandate higher minimal wages always 1) increases unemployment, and/or 2) causes price inflation relative to what unemployment and prices would have been in the absence of the minimum wage. To the extent the damage is minimal, it is only when the minimum wage is set low enough to come close to the market equilibrium. But even this minimal damage always hurts the most marginal laborers the worst. The ones with the fewest skills and/or economic options are the ones most likely to get introduced to involuntary unemployment for the rest of their lives.