Why not a $100 minimum wage?
March 7, 2013
By John Seiler
The Daily Kos liberal Web site is running a $10.10 national minimum wage campaign:
“To the 113th Congress:
“The minimum wage needs to keep up with the times, but today, it’s fallen behind, leaving too many working Americans in poverty. Please raise the minimum wage to $10.10 and index it to inflation so that minimum-wage workers won’t have to wait years for a raise.”
And you can sign your name to a petition for it. That amount is above the $9.00 minimum wage President Obama is seeking.
Currently, the federal minimum wage is $7.25 an hour; California’s state minimum wage is $8.00, although there are moves to increase that. And San Francisco imposes $10.55, the highest in the nation.
From the federal $7.25 minimum wage to $10.10 would be a 39 percent pay increase. Who wouldn’t want a 39 percent pay boost?
Well, if we have “too many working Americans in poverty” who have “to wait years for a raise,” why don’t we just increase the minimum wage to $100 an hour? People really could do well on that. It works out to $208,000 a year, about what you need to join the middle-class in high-priced California. People on welfare rolls would be attracted back to the work force. Welfare payments would drop almost to zero. Federal, state and local budgets, no longer having to pay for welfare, would run up surpluses that could be used to fund other great new government programs.
Of course, today only about 5 percent of workers make $208,000 a year. Mandating a $100-an-hour minimum wage would mean 95 percent unemployment.
But raising the minimum wage to $10.10 also would cause unemployment. Businesses would just kill millions of jobs, replacing the fired workers with foreign labor and machines — or just go out of business.
A $10.10 federal minimum wage would put the whole country on the level of San Francisco’s $10.15. But the whole country is not like SF. In the incredibly expensive City by the Bay, if you can make only $10.15 an hour, you should leave.
To expect low-wage, low-cost Mississippi and Alabama to pay the same minimum wage as S.F. is absurd. I checked Zillow.com. In San Francisco today, the median house price is $763,000.
But in Tuscaloosa, Ala., a nice college town with the University of Alabama, the median price is just $139,000. That’s less than one-fifth as much.
Imposing a San Francisco-level minimum wage on Alabama would devastate the state, boosting unemployment to painful levels.
Especially hurt would be black teenagers across the country. According to economist Walter Williams:
“With each increase in the minimum wage, black teen unemployment rose relative to whites and teen unemployment rose relative to adult. Why? Put yourself in the place of an employer and ask: If I must pay to whomever I hire $7.25 an hour, plus mandated fringes such as Social Security, vacation, health insurance, unemployment insurance, does it pay me to hire a worker who is so unfortunate so as to have a skill level that allows him to contribute only $5 worth of value an hour? Most employers would view hiring such a person a losing economic proposition.
“Therefore, the primary effect of a minimum wage law is that of discrimination against the employment of low-skilled workers.
”Teenagers tend to be low skilled. They lack the experience, knowledge and maturity of adults. That means they will be the primary victims of a minimum wage law. But why are black teens more heavily impacted than white teens? Black teens are far more likely to come from broken homes and attend some of the worst schools in the nation. Therefore, a law that discriminates against the employment of low-skilled workers will have a greater impact on black workers. Moreover, the minimum wage subsidizes racial discrimination. After all, if you must pay $7.25 an hour to whomever you hire, you might as well hire people you like the most, even if they are of identical skill.
“The little bit of money a kid could earn after school and on the weekends is not nearly as important as the other benefits from early work experiences. Any kind of job, paying any wage, teaches a youngster that he must be on time, respect supervisors, develop good work habits, plus there’s the self-esteem and pride that comes from being at least financially semi-independent. Early work experiences benefit any kid but are far more important for kids from broken homes, who reside in crime-ridden neighborhoods and attend rotten schools. If they are to learn anything that will make them a more valuable employee in the future, it will have to come from work; they won’t learn it at home or in the schools. For Congress to enact higher and higher minimum wages, to benefit their union supporters, is shameful and cruel.”
Unions like the minimum wage because it destroys lower-cost competition.
Far from “helping” the poor, as the Daily Kos, Obama and many others maintain, increasing the minimum wage would destroy their jobs. More of the poor, instead of enjoying the dignity of a job, would go on the welfare rolls, increasing the cost to taxpayers.
The minimum wage is a perfect leftist program: It destroys jobs and lives while increasing government.