Sunday, July 30, 2006

Problems with Minimum Wage

Are we to believe that raising the minimum wage will help the low middle class? The Supreme Court had once found the minimum wage unconstitutional. You can find more information about minimum wage on Wikipedia. Throughout history the minimum wage has been used to reduce the amount of labour. I can not recite the history of the minimum wage but once again I turn to economic blogs to help provide an explanation. Cafe Hayek's response, Marginal Revolution's response, and I'll let you read through one of my favorite economic blogs the Austrian Economists to understand why society does not accept the idea that the minimum wage is bad.

4 comments:

BDM said...

One does need to be careful about Wikipedia. Since a lot fo people can contribute to it, a great deal of information can be falsified on the site. Just a heads up.

Idunois said...

bdm, I agree with your comment, but I enjoy the ability for many people to contribute to it. This way we are invited to different views upon controversial subjects like the minimum wage, other views than just mine.

Jennifer said...

Being a person who lives off of minimum wage I find that this increase will help me a great deal. I'm all for it.

Idunois said...

Jennifer,
We are always for things when they help us at a time. Minimum wage was created to not help the poor but to hurt them. Not meaning to bring racial issues but think of South Africa where the whites believed themselves in higher standards than the blacks. They created a minimum wage in order to cause the blacks to have a higher cost. Before the skilled white laborer would cost as much as 7 unskilled black laborers, but after the minimum wage the unskilled black laborers now cost more therefore for one skilled white laborer would cost as much as 4 black unskilled laborers.

In our own country, minimum wage was used to increase the cost of women compared to men. It was called unconstitutional and yet we keep trying to persuade it is the right thing to do. It helps a limited few and hurts a large amount of others. Remember by raising the cost of low wage employees the companies are forced to reduce the cost elsewhere. Therefore a decline in safety, insurance, or another area. If you are a hard worker, you can ask for an increase in you wage. If your employer does not wish to increase your wage then you can move on once you find one that is willing to give you an incentive to work harder.