-- Reduce the federal minimum wage. In 2007, Congress enacted a three-step increase in the minimum wage, which was then $5.15 per hour. The final installment took effect in July, raising the rate to $7.25 per hour. In the meantime, unemployment climbed from 4.7 percent to 9.5 percent.Really. It's never a good time to raise the minimum wage according to these guys. The problem is low-skilled workers don't get hired because they lack job skills. The answer isn't to train them, the answer is to cut back on social programs and hope they pull themselves up in a free market, of course. That's capitalism!
I am not saying that the minimum wage increase caused this; far from it. But study after study has shown that this supposed benefit to the poor prices low-skilled workers out of entry-level jobs. It was unwise to keep raising the cost of hiring them in a recession.
Economist David Neumark, co-author of a definitive book on minimum wages, said in a June Wall Street Journal op-ed that the July increase probably killed 300,000 jobs that would have otherwise gone to teenagers and young adults.
Wages have largely stagnated for decades. Raising the minimum wage isn't the problem, banks crapping out at the gambling table was the problem.
[UPDATE 4:10 PM]
God we're screwed in this country. It makes me weep.
Here's the funny part, the same people saying wages are skyrocketing and the economy can't bear it (and somehow attribute a 4% swing in unemployment to something that doesn't affect many states anyways) are the ones begging Obama not to tax/cap bankers more because they need a way to attract talent to the finance industry.
ReplyDeleteIndeed. Raising wages is a "job killer" unless it's for a financial firm. Then it's "job growth."
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