Dec 03, 2009
I fully endorse Posner's suggestions to cut the minimum wage, but I do not see that happening with the present Congress. My favorite approach it to try to stimulate the economy by cutting income taxes, especially corporate income taxes and other taxes on capital, both physical and human capital. Such tax cuts will stimulate investments in the economy, and in this way increase the demand for workers.
The minimum wage is a job-killing policy but it sounds so good -- somehow magically everyone can earn more money! The truth is that many do see their wages bump up a bit but many folks also lose their jobs. And these are people who're working at or near minimum wage level. So, the poorest are the most harshly affected by this policy.
It also never occurs to most non-ideologues that companies have a vested interest in retaining good employees. If you are only making minimum wage after holding a job for half a year to a year, you're doing something wrong and probably deserve less. Even in high school, in rural VA, I've never earned minimum wage; every employer has just fired employees who didn't deserve more than that in compensation because there was a direct correlation between their compensation and value.
Posted by: Mike T | Dec 07, 2009 at 07:03 AM