Let's raise the minimum wage to $900 an hour
During his State of the Union address, President Obama called for raising the federal minimum wage to $9 an hour.
[L]et's declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty, and raise the federal minimum wage to $9.00 an hour. We should be able to get that done.
This single step would raise the incomes of millions of working families. It could mean the difference between groceries or the food bank; rent or eviction; scraping by or finally getting ahead. For businesses across the country, it would mean customers with more money in their pockets. And a whole lot of folks out there would probably need less help from government.
Obama touches on the liberal argument for raising the minimum wage, but let me spell it out more directly here.
Raising the minimum wage to $9 an hour wouldn't increase unemployment, but would give poorer workers more spending money. Since poorer workers tend to spend any cash they receive immediately, this would help the economy.
If this is true, why stop at $9 an hour? If government can "raise the incomes of millions of working families" through unconstitutional mandates and not hurt those workers or the broader economy, it's time to raise the minimum wage to $900 an hour.
Who's with me?
Liberals — even the very liberals who make the above argument — don't support that plan though. I know because yesterday on KNPR's State of Nevada I asked Danny Thompson, Secretary-Treasurer of Nevada's AFL-CIO, and David Cooper from the liberal Economic Policy Institute to support that very idea. Both passed though, with Cooper acting like the idea was absurd.
And of course the idea's absurd. But it's an idea based on the very principles Cooper, Thompson and Obama espouse.
What are the true impacts of the minimum wage? A recent Las Vegas Review-Journal editorial puts it well.
Harvard University's Greg Mankiw says there is 79 percent agreement among his peers that "a minimum wage increases unemployment among young and unskilled workers" - ranking just below the fact that a "large federal budget deficit has an adverse effect on the economy," at 83 percent.
"Tonight, let's declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty, and raise the federal minimum wage to nine dollars an hour," the president said.
But economists have demonstrated that hardly anyone tries to raise a family on the minimum wage. Rather, low-income jobs provide a bottom step on the ladder for young and inexperienced workers, who quickly earn raises as they improve their usefulness to employers.
One of the terrible ironies here: The most pernicious effects of a high minimum wage — a sop to the labor unions who have long considered Mr. Obama their go-to guy - are felt among minority youth, who already struggle mightily to reach that "bottom rung."
While the overall U.S. unemployment rate stands at 8.1 percent, African-American unemployment is now at 14.1 percent, and the official unemployment rate for black youth ages 18 to 29 is 22.3 percent.
Bonus: Here's Milton Friedman detailing the destructive impacts of the minimum wage.