Discussions of minimum wages are rarely based on at least some minimum facts. The most recent example comes from Meg Hansen, head of the group Vermonters for Health Care Freedom and a zealous proponent of unfettered free markets.

This month, she penned an article (A critique of Vermont's political economy) that included this unqualified assertion: “In Seattle, the average low-wage worker lost $125 a month following the minimum wage increase to $15/hour, and yet the state of Vermont will follow suit.”

No uncertainty, no proof, just assertion. No mention of the fact that Barry Ritholtz recently wrote in Bloomberg Business Week (What Minimum-Wage Foes Got Wrong About Seattle), “The dire warnings about minimum-wage increases keep proving to be wrong ... the authors behind an earlier study predicting a negative impact have all but recanted their initial conclusions.”

Nor does Hansen mention an in-depth examination of Social Security earnings data following minimum wage increases (The Distributional Effects of Minimum Wages), concluding that “raising the minimum wage increases incomes at the bottom … this increase persists for several years.” These benefits were not diluted or eliminated by loss of jobs or hours. In a personal communication, one study author said the ”effect of minimum wages on hours or the number of jobs … if [any], are not large enough to overcome the increase in wages.”

Stating that an increase in the minimum wage will decrease workers’ wages and kill jobs without checking the facts is nothing but fear mongering. Minimum wage opponents need to do their homework.

Charlie Murphy


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(3) comments

Stu Lindberg

“Unfortunately, the real minimum wage is always zero, regardless of the laws, and that is the wage that many workers receive in the wake of the creation or escalation of a government-mandated minimum wage, because they lose their jobs or fail to find jobs when they enter the labor force. Making it illegal to pay less than a given amount does not make a worker’s productivity worth that amount—and, if it is not, that worker is unlikely to be employed.”

― Thomas Sowell, Basic Economics: A Citizen's Guide to the Economy

Stu Lindberg

https://www.youtube.com/watch?v=RNa6tNUt8dQ Minimum Wage, Maximum Folly.


Seriously, when an employer is forced to raise the minimum wage beyond what they believe the job is worth they will find a way to eliminate that job. Perhaps they will add those tasks to another employee who is doing other things. Perhaps they will find a machine to do the work.
When you raise the pay (benefits) of the entry-level employee everyone else in the pecking order will expect (demand) a wage increase as well.

When the employer then increases the cost of their product/service the "minimum wage" worker is back in the same position they were in before the increase.

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