Saturday, April 9, 2016

Why Not Make It $100/hour?

California has just adopted a $15 per hour minimum wage, to be phased in over six years. New York is doing the same thing.

It amounts to a social science experiment, and its proponents argue that it will "give a raise" to low-income workers. Actually, it will do nothing of the sort. It will, rather, deny low-skilled workers the one advantage they have, which is a willingness to work for less than others. Which means more of them will be unemployed, or else will move to states wise enough to avoid this kind of experiment.

Why not make the minimum wage $100/hour?  Because we all know that wouldn't work.  We want to pretend there's no reason $15/hour won't work, and perhaps in a tight labor market it will.  An easy prediction though is that a $15/hour wage will price out low skill workers, incentivize the hiring of illegal aliens for whom we don't have to pay FICA etc, and thus will do little to shift the situation of the average unskilled laborer.

Hey, with good intentions like these states have, how can we blame them if they disenfranchise the unskilled and create more well paid illegals?

Here's another take on the topic:

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