What Would You Think? – Minimum Wage

There’s been talk about whether we should raise the minimum wage.

Supporters suggest several reasons for this:

  • Provide Americans with a livable income, this removing many working poor from government assistance.
  • Relieve the government from subsidizing companies who don’t pay a decent wage, provide adequate hours or healthcare benefits, thus burdening the rest of the population.
  • Many Americans who work in these jobs are hard-working but simply incapable of doing anything else, either due to intellect, education or mental health issues.

Those in opposition state:

  • People who work minimum wage jobs are lazy.
  • Raising the minimum wage would negatively effect businesses that rely on low-cost, low-skilled labor.

What would you think about?

  • Keeping the minimum wage where it is for anyone who works at least 40 hours each week, time and a half above 40, and once an employee works for at least 90 days, requiring the employer to provide a defined minimum healthcare benefit, to reduce the burden of their employees on our healthcare system.
  • Raising the minimum wage to $16 per hour for anyone working fewer than 40 hours in a week but not requiring healthcare benefits be provided.

This Post Has One Comment

  1. I think you left out one reason for the opposition. Raising the minimum wage would effectively hurt the poorest individuals in our society by keeping them out of the work force. Two reasons for this.

    First, there is a tradeoff between capital and labor. As the cost of labor increases, the relative cost of capital is lower. Therefore, employers will elect to invest more in capital (i.e. automation that eliminates low skill jobs).

    Second, if employers are mandated to pay $16, then they will choose candidates that are higher skilled. Therefore, the opportunities for entry jobs of no (or very low) skilled workers becomes more scarce.

    Therefore, the actual effect of increasing the minimum wage hurts the poorest, lowest skilled segment of the population.

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