$500/hour Minimum Wage

Now that the Democrats are controlling the agenda in Washington, the federal minimum wage issue is going to come up again. No fiscal conservative himself, President Bush supports a raise of the minimum wage to $7.25 in steps.

In this article, George Will does an excellent job of highlighting this issue and explaining why an increase in the federal minimum wage does not make sense. I encourage you all to read it.

The federal minimum wage has not been raised since 1997, so 29 states with 70 percent of the nation's work force have set minimum wages of between $6.15 and $7.93 an hour. Because aging liberals, clinging to the moral clarities of their youth, also have Sixties Nostalgia, they are suspicious of states' rights. But regarding minimum wages, many have become Brandeisians, invoking Justice Louis Brandeis' thought about states being laboratories of democracy.

But wait. Ronald Blackwell, the AFL-CIO's chief economist, tells The New York Times that state minimum wage differences entice companies to shift jobs to lower-wage states. So: states' rights are bad, after all, at least concerning — let's use liberalism's highest encomium — diversity of economic policies.

The problem is that demand for almost everything is elastic: When the price of something goes up, demand for it goes down. Obviously were the minimum wage to jump to, say, $15 an hour, that would cause significant unemployment among persons just reaching for the bottom rung of the ladder of upward mobility. But suppose those scholars are correct who say that when the minimum wage is low and is increased slowly — proposed legislation would take it to $7.25 in three steps — the negative impact on employment is negligible. Still, because there are large differences among states' costs of living, and the nature of their economies, Sen. Jim DeMint, R-S.C., sensibly suggests that each state should be allowed to set a lower minimum.

But the minimum wage should be the same everywhere: $0. Labor is a commodity; governments make messes when they decree commodities' prices.

Read the entire article.

I do not have a single person in my employ working for minimum wage, but I can tell you that it will cost me money. Though my lower paid employees are happy with their current wage, they won't be any longer when others are now making as much as them.

But really, why stop at $7.25. Let's let everyone be as rich as the trial attorneys and let them drive Escalades. Let's pay everyone $500/hour!