August 28, 2013

An Observation on a $10 Minimum Wage Idea

Via MSNBC, (H/T Hot Air), Senator Barbara Boxer argues that the U.S. needs a higher minimum wage.  Say $10 per hour. Let me add my two cents. First, here's Boxer on MSNBC:

Here's an idea, let's just make every American rich by raising the minimum wage to $50 per hour. There's a reason that's not possible - no one will hire anyone. It's the same argument as the implications that Obamacare heaps upon employers. But we've discussed the perils of the minimum wage here before, and that's not my latest observation. My more recent observation came from my wife when they were raising the minimum wage here in Ontario Canada to $10 per hour.
She was debating a few co-workers who said that a raise in the minimum wage would help them even though they made significantly more than the minimum wage.  She argued that the reverse was in fact true.  She pointed out that while those whose work efforts were less valuable than their own (meaning the work of her co-workers) were now making more for doing the same work, and therefore her co-workers' value, relatively speaking, had fallen.  Awesome point! I must add that I am proud of my wife for taking on co-workers in this fashion and indeed, converting a few of them to her line of thinking.  That's always tough.
Setting aside all of the arguments about it putting people out of work (which ultimately it will do), there's an expansion on the idea that my wife put forth.  If you are someone making $13 per hour and you are wearing yourself out to do so, there are now less lucrative but less tiresome jobs available.  It might be worth the step back for the sake of your health.  Alternately, you could stop working as hard because you didn't get an inflationary raise to keep you equidistantly ahead of your minimum wage counterparts working at McDonald's.  So you slack.  Productivity goes down and the job goes to India.  And we are back to putting people out of work - just not the people at the minimum wage level this time.
But I could be wrong.  Barbara Boxer could be a genius with all of the answers and I'm an idiot....Nah!

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