With the Democrats now moving the agenda in Washington, the federal minimum wage issue is going to come up again, and quickly. Though President Bush supports a raise of the minimum wage to $7.25 in steps, there are many good arguments why this should not be supported. In this article, George Will does an excellent job of highlighting this issue and explaining why an increase in the federal minimum wage does not make sense. I encourage you all to read it. Here's a clip from the end of the article:
The problem is that demand for almost everything is elastic: When the price of something goes up, demand for it goes down. Obviously were the minimum wage to jump to, say, $15 an hour, that would cause significant unemployment among persons just reaching for the bottom rung of the ladder of upward mobility. But suppose those scholars are correct who say that when the minimum wage is low and is increased slowly — proposed legislation would take it to $7.25 in three steps — the negative impact on employment is negligible. Still, because there are large differences among states' costs of living, and the nature of their economies, Sen. Jim DeMint, R-S.C., sensibly suggests that each state should be allowed to set a lower minimum.
But the minimum wage should be the same everywhere: $0. Labor is a commodity; governments make messes when they decree commodities' prices.
Washington, which has its hands full delivering the mail and defending the shores, should let the market do well what Washington does poorly. But that is a good idea whose time will never come again.
Again, here's the link. Check it out.
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