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http://www.rollcall.com/news/minimum_wage_hikes_americas_silent_job_killer_commentary-229491-1.html
Following a string of state-level initiatives to raise minimum wages, Democrats in the Senate are salivating over the prospect of a national wage hike. Beginning with President Barack Obama’s 2008 campaign, in which he repeatedly pledged to increase the federal minimum wage on an annual basis, this issue has remained on the back burner throughout Obama’s presidency until now, when the administration is in desperate need of a distraction. The current incarnation of the proposal would put a double burden on U.S. businesses at a time when the economy needs them to thrive.
The latest effort comes from Sen. Kirsten Gillibrand, D-N.Y., who has authored a proposal to raise the minimum wage from its current rate of $7.25 to $10.10 an hour. In addition to the immediate increase, she also wants the wage indexed to inflation, putting future increases on autopilot.
A one-time increase in the minimum wage is a bad enough idea on its own, but indexing wages based on inflation is even worse. Imagine having to make plans regarding payroll, hiring, firing, raises and benefits when the wages you are allowed to pay are constantly changing based on volatile numbers coming out of the Bureau of Labor Statistics. The sheer level of uncertainty — to say nothing of the administrative costs accompanying regular and frequent wage increases — would introduce a level of nightmarish complexity to any attempts at entrepreneurship.
The minimum wage is one of those unique policies that is universally recognized as bad economics, yet persists due to appeals to emotion and politically clouded thinking. Artificially setting prices above the market level creates fewer buyers and more sellers. In the case of labor, this translates to unemployment.
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