The Punning Pundit

Fucking Santorum. We can always count on him for moronic stuff like that. The gap between the richest and poorest Americans is *still* growing, and this is not the time to weaken the minimum wage.

On a happier note, Happy Birthday Andrew!

Raising the minimum wage won't solve the problems you're saying it will.

The problems aren't directly connected, and mostly not even indirectly connected.

First of all, raising the minimum wage just forces inflation. It might, _might_ affect things in a short term, few years at most, improvement. However, that money that's being paid has to come from somewhere, and that somewhere is _always_ the consumer. But, since the wage earner IS the consumer as well, thier expenses go up, to cover the cost of thier labor, which means, in the end, that they don't gain any ground. Food just gets more expensive, education gets more expensive, etc.

I'm not trying to be heartless and say that poor don't have some rights to not starve, have a roof, etc. Nor am I saying that this particular bill is right, good, etc. However, I am saying that your arguement to increase minimum wage is vacuous at best, and inexcusably malicious at worst.

Rand, you're right the money does have to come from somewhere, and somewhere is always the consumer, but it's never *entirely* the consumer. And if the reason we should increase the min wage is because it will only be helpful for a few years, well, damn, let's raise the min wage! It's been like seven years since it was last raised, and the real value of the min wage is lower now than it was after it was last raised, so let's raise it again now. If, in a few years, the benefit has been eroded, then we raise it again.

We could even index it to inflation to avoid the hassle of having to vote on it every couple of years. Some U.S. cities are already doing this, having become fed up with federal inaction on the issue.

It's funny to me that everyone brings up the effect on consumer prices, but no one ever brings up the effect on consumer spending. Give min wage workers a higher wage, they will buy more consumer goods in the immediate term, before the middle- to long-term price effect kicks in. This additional consumer spending will grow the economy, allowing businesses to expand, add jobs. This would also tend to push inflation, but let the Fed worry about that. That's what they're there for.

It's true that every time the gov't does anything in the area of economics, it has unintended consequences, but it's also true that every unintended consequence can be managed.

Andrew, great post, but you should comment more on Dean's World. I'm on my own over there!!

Drew:

Where, if not the consumer, does the money come from?

If you have to keep raising minimum wage, then you aren't solving the problem. Further, everytime the minimum wage is raised, it hurts more of the population. LESS money, overall, gets spent. Coupling it to inflation is just tightening the feedback loop and allowing it to spiral out of control even faster, and with more negative results.

The end result of your arguements, not the ad absurdum, just the logical conclusion, is a communist style economy, which has been proven, time and again, to not work. Further, it's been proven to end disasterously, hurting many more people than it ever helps.

Here's a test question for you. Take the proposed equal, but opposite solution, and explain the results. If the purpose of minimum wage is to allow everyone to afford a minimum standard of living, why not price fix the minimum standard of living to allow current wages to purchase what's needed.

On a side note... While lower incomes would experience a short-term (measured in months, not years) increase in spendable resources, middle incomes would experience a short AND long term decrease in spendable income. Since thier raises are not index to inflation, the more inflation, the less they can buy. Since that's the biggest bracket that spends the most on non-necessities, you have a greater negative than positive by increasing minimum wage.

Why not at least entertain other solutions? How about deflation? If we encourage, or require, the government (and the vaunted Fed) to maintain a deflationary economy, we'll get cheaper prices for goods while earning the same amount. It also happens to be the natural direction a market economy heads towards. Sure, it's effects take longer to accomplish, but it's also an actual solution, not a snake-oil salve for the masses.

National Sales Tax would also help the poor, tax the rich, and while it's not a complete solution, it does have the advantage of being a short term winner. If you're not familiar with it, the standard plan is no income tax, no tax of necessities (food, shelter, clothes, education), tax only at the sales counter.

There's others too... For instance, require education benefits from part-time employers. Matching funds, scholarships, etc. Why give people fish, when they could be taught to fish?

Rand.