Keynesian: Minimum Wage Hurts The Poor

[Matt Collins]

From John Stossel:
http://stossel.blogs.foxbusiness.com/2010/09/27/minimum-wage-hurts-the-poor/

 

[StilesBC]

Indeed. Workers can only be "exploited" if they are coercively prohibited from finding better employment.

Tell me that the mentally or physically challenged would not be better off bagging groceries for $3/hour or doing something equally as mundane. Tell me that these people don't want to be included in society and prefer to be kept in their homes where they're made to feel as invalids.

I can almost guarantee that if given the opportunity to work for 20 hours/week at $240 per month, most of these people would jump at the opportunity to feel like a normal, productive member of society. Perhaps the work would even help them in coping or improving their mental/physical condition.

Minimum wage laws intentionally exclude our most vulnerable members of society from contributing to it. It is one of the most disgusting hypocrisies of leftist labour market regulation. It is even more disgusting that it is done under the guise of "protecting workers."

 

[anaconda]

Econ 1A: minimum wage creates unemployment at the margin.

 

[Legend1104]

If there was no minimum wage, the evils of inflation would stop being a secret and everyone would know that they were being screwed. Minimum wage just hides government theft.

 

[FrankRep]

Walter Williams with Thomas Sowell - On Minimum Wage

YouTube - Williams with Sowell - Minimum Wage


Walter Williams: Minimum Wages and Occupational Licensing:

YouTube - Good Intentions 2of3 Minimum Wage, Licensing, and Labor Laws with Walter Williams

 

[Matt Collins]

If there was no minimum wage, the evils of inflation would stop being a secret and everyone would know that they were being screwed. Minimum wage just hides government theft.

Can you expand on this please?

 

[randolphfuller]

This is a myth. Every increase in the minimum wage has benefited low income earners. It has never caused unemployment

 

[Cdn_for_liberty]

minimum wage benefits unions because they don't have to worry about people undercutting them.

 

[RonPaulGetsIt]

Minimum wage laws make it illegal to hire a marginal worker whose hourly utility is less than the minimum wage. They in effect make those workers jobless rather then let them make what their skill set could earn them.

my 2 cents on it here......

 

[Fox McCloud]

This is a myth. Every increase in the minimum wage has benefited low income earners. It has never caused unemployment

Dunno if you're being sarcastic or not...if you are, fine.

If you're being honest....epic fail: YouTube - American Samoa: The real story 60 Minutes missed

 

[RonPaulGetsIt]

This is a myth. Every increase in the minimum wage has benefited low income earners. It has never caused unemployment

Elevator operators and gas station pumpers were wiped out due to minimum wage laws. It was cheaper to mechanize then keep the employees.

There are millions of other workers who could earn say $4.00 an hour doing unnecessary but nonetheless helpful work. You will never know enough to miss those workers because they will be unseen....their jobs not allowed to come into existence.

 

[EndDaFed]

The Social Security taxes don't help much either. Let's face it the program will not be around for long.

 

[Disconsolate]

This is a myth. Every increase in the minimum wage has benefited low income earners. It has never caused unemployment

lol.

 

[Fox McCloud]

The Social Security taxes don't help much either. Let's face it the program will not be around for long.

exactly; the 7.65% is just factored into your wage; so that federal minimum wage of $7.25 an hour is really $7.80 an hour, since you have to factor in Medicare+FICA.

 

[EndDaFed]

exactly; the 7.65% is just factored into your wage; so that federal minimum wage of $7.25 an hour is really $7.80 an hour, since you have to factor in Medicare+FICA.

The employer also pays another 7.65% on top of that.

 

[Kregisen]

This is a myth. Every increase in the minimum wage has benefited low income earners. It has never caused unemployment

lol what's sad is people out there actually believe this though. Last source I saw had the 70 cent federal minimum wage increase lose over half a million jobs.

 

[Southron]

Minimum wage is a subsidy for teenagers.

 

[Fox McCloud]

The employer also pays another 7.65% on top of that.

I think you misunderstood what I meant.

If you get payed minimum wage (federal), that's $7.25 an hour. With Social security (+medicare and medicaid), your purchasing power is decreased to $6.69 an hour.

That said, if FICA+Medicare+medicaid were removed, the same people earning $7.25 an hour would suddenly get paid $7.80. Why? First off, he doesn't have to pay is portion (7.65%), and...the employee doesn't have to pay the other 7.65% either. Why did I say the employee paid both? Because he does; from a business standpoint, the other 7.65% is just taken out of the total wage rate he's offering you since the employer will past on all costs associated with you into your wage...therefore, if, say the government were to mandate $1000 health insurance for each employee, he's just going to lower your regular wage by 48 cents per hour (or subtract 48 cents per hour off your next raise...or not offer a raise at all; it just depends)...alternatively, you could think of this as adding on 48 cents per hour cost to a minimum wage (if such a $1000 insurance mandate existed).

So, in actuality, the Federal minimum wage is $7.80 an hour...and FICA+Medicare+Medicaid is 15.3% off of this hourly rate; pretty nasty hit (and that's just payroll!).