ECONOMIC MISCONCEPTION #3 -- THE MINIMUM WAGE

This is the third in a series of posts relating to how the press has misled many conservatives into supporting liberal positions on certain economic issues rather than upholding the conservative point of view.

Misconception: Raising the minimum wage is good for the poor.

A recent Gallup opinion poll (Nov. 2013) found that 69% of Americans favor raising the minimum wage and, somewhat surprisingly, 58% of Republicans also favor an increase. This opinion is in direct opposition to the fundamental principle of supply and demand which states that if you raise the price of something (like labor) the demand for it will go down. That is, if you force businesses to pay more for labor they will cut back on the use of it.

Obama is preparing to push for an increase in the minimum wage to $9 per hour. The reality is that some people are simply not worth $9 per hour. So those unfortunate soles will be laid off or not hired as would have been the case. Thus, the end result is that many of the lowest wage earners (i.e., the poor) will lose their jobs or remain unemployed and become even more unemployable. Raising the minimum wage relegates yet more of the poor to the welfare rolls. Heck, if raising the minimum wage was the solution to helping the poor get ahead why not raise it to $20 per hour?

Raising the minimum wage harms exactly those persons who the policy is supposed to benefit. Just another example of the unintended consequences of government policies. The forces of supply and demand operate 24/7, everywhere around the world, without exception. No government policy, no matter how well meaning, can negate this reality.

Have a nice day.

DWD