Episode 31: Raising the Minimum Wage Won’t Help Much, and Could Actually Make Things Worse
In this episode, I have a one-track mind. In the President’s State of the Union address, he proposed increasing the minimum wage by about 25% to $9 an hour, as though this will somehow defeat poverty.
The fact is, according to the government’s own Bureau of Labor Statistics, only about one and a half percent of all American workers are getting the minimum wage and not living with their parents. And on average, even this group isn’t in poverty.
Further, raising the federal minimum wage raises the wages of far more people than just those at the minimum. This causes prices to rise in a way that erases much of the increased minimum.
And if labor costs more, in addition to prices going up, workers may be laid off, or businesses may slow down hiring. Is this what we want to do now? In this economy?
Make economic decisions on facts, not emotion.
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