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Real Talk with Julie Borowski: Raising the Minimum Wage is a Bad Idea

New Real Talk with Julie Borowski is up!

The minimum wage is a hot button issue right now. At first, raising the minimum wage may sound awesome! But actually, hiking the minimum wage would hurt young and unskilled people.

stonestone's picture
stone stone

I am unable to fathom what would convince anyone that keeping wages nice and low could be remotely good for the country. It makes zero economic sense. So the argument is somehow that raising wages will "hurt" young people? Ok, so let's take that same exact statement and apply it to both middle and upper middle class jobs. So if that be the case then nobody should EVER have their wages raised... right? Because after all, the whole belief is that doing so will cause those companies to lay off people. So how much sense does that make given that this has not ever been the case? Before making any sort of economic statement it helps to understand basic economics. This is yet another total piece of baloney claim. What's more, if the GOP wants to become remotely appealing to the younger generations then they're going to have to stop making nonsensical claims like this one.

Morlocke's picture

Obviously you are not at all familiar with formal logic, or you would realize that the example was intentionally preposterous. The purpose of the suggested mental exercise being to examine the effects of such a policy by using an extreme example. If a 30% increase is good, then shouldn't a 1000% increase be even better? The point of the article (which you obviously still missed) is that a large, government mandated increase in the minimum wage will have distorting and negative effects on employment. Some employees will make more money, but others will lose their job entirely. Will those people be better off?

BTW - the assertion that "NOBODY should have their waged raised" is completely absurd. Companies raise employees' wages all the time without a mandate from the federal government. Wages are determined by the value provided by employees, so the way for an employee to increase their wages is to increase their value to the company. Most minimum wage employees end up making more within a year of being hired because they learn skills that improve their value.

You do bring up a valid point regarding inflation, but the solution in that case is quite simple: inflation index the minimum wage. This has been suggested by Senate Republicans debating the bill, but this approach will never be supported by Democrats because it would take away an election year issue for them. Namely, "vote for us and we will make your boss pay you more!" They don't have a record of economic success to run on, so they are reduced to obvious vote-buying schemes aimed at those too naive to understand the real world effects of such a policy.

stonestone's picture
stone stone

You seem to be using a familiar tactic: Use a preposterous example- your little bit about :" Why not raise wages to $100 an hour?" Humans use logic and your statement uses none. But let me ask you this: I presented a very good question above. If lower class Americans should not have their wages raised over fear of inflation then if we were to pretend that this kind of economic sense was true, then NOBODY should have their wages raised either. The entire problem with the argument that wages should not be raised is that it relies on an entirely static model. Inflation is a reality. The inflation you and others fear is a reality for those who don't get paid squat. If that is the genuine concern, then there is a fix: Raise the wages.
Either way, I find it humorous that the above video is such a weak and transparent attempt to somehow make young people think the GOP or the Tea Party is genuinely concerned about them. They soooo desperately want those young votes and yet deep down inside they know they lost that battle a very long time ago. So the best they can do is come up with some dumb video that claims that the very jobs a lot of those young people work at should retain their stagnate, low wages? I'm sorry, but what was that about basic economics? Yeah... I thought so...

Morlocke's picture

Since you are obviously unfamiliar with the mountains of economic data that support the claim that substantial increases in minimum wage result in lower employment levels for young and unskilled workers, we will try a quick mental exercise. Why don't we just raise the minimum wage to $20/hour? ...or $100/hour? How many small businesses (which employ 70% of our workforce) would be able to afford such an increase? How much will prices go up to offset that increase? How will increased prices affect consumer demand?

Anyone that understands basic economics can tell you what happens when you increase the cost of a commodity (such as labor) while supply remains the same - demand (employment) goes down.