Sunday, December 05, 2010

Scrap the Minimum Wage

By Art Carden, Forbes Magazine, September 13, 2010

Raising hourly wages seemed like a good idea, but it has only destroyed jobs.

Do you want to get serious about expanding employment? Then it's time to realize that spending on jobs programs is the wrong approach. It would be much better to eliminate hurdles for people who want to find work. One of those hurdles is the minimum wage.

The effect of a minimum wage is a classic example of the law of unintended consequences: Minimum wages create unemployment.

Eliminating the minimum wage would send a powerful and positive economic message. It would show investors, entrepreneurs and employees that policymakers appreciate the laws of supply and demand--and that prosperity comes from harnessing production, not redistributing wealth.(link)

My Comment

This article explains how the minimum wage hurts young people and minorities most of all and shows how government stimulus spending simply reshuffles resources and creates temporary increases in employment in some sectors at the expense of other sectors.

It is time for a Republican leader to step up and advocated the things we know to be true. With employment at 9.8% and unemployment insurance needing to be extended again beyond the current 92 weeks, it is time for someone to advocate getting government out of the way and letting the market work.

If it were up to me, I would like to see the minimum wage completely eliminated but know that that is not realistic. However, it Republicans would show the same devotion to rolling back the minimum wage as they do expanding the Bush era tax cuts, it may be possible to negotiate a modest roll back to perhaps the 2007 level of $5.85. I suspect that a roll back of the minimum wage is at least as important to economic growth as expanding the tax cuts. It may be even more important. If Republican could not get an across the board roll back, they could try for a roll back in those states with greater than average rates of unemployment.
If unemployment dropped in those states, that would show the wisdom of the rollback. 
Will no politician step forward and advocate this? 

It is time to roll back the minimum wage and let people go to work.

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