Business Week: More Ammo For A Higher Minimum

New research says a ripple effect would hike the pay of a lot of family bread winners

If you want to pick a fight with a free-market economist, say something nice about the minimum wage. Democrats in Congress want to raise it next year. As they gear up, economists in the opposition are arguing that it will make unskilled workers too expensive to hire. They also say it's an inefficient way to help the working poor, since a lot of the people who make the minimum wage, now $5.15 an hour, are teenagers living at home.

But the economics profession is far less united against the minimum wage than it was a generation ago. Since the early 1990s an influential group of economists has poked holes in the once strongly held belief that the minimum wage is a major job killer. And now there's economic research disputing the rest of the conventional wisdom. Some economists are saying that minimum-wage increases have a ripple effect, bumping up the pay of a large portion of the working poor. If they are right, that would strengthen the political appeal of a minimum wage hike by increasing the number of potential voters who are helped.

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slippery slope said...

You commies,

The minimum wage is a slippery slope.
You start out upping the Min. Wage to
$6.00, then you'll want the Cadillac HealthCare. Before you know it you'll be demanding a 5 day work week.

Karl M said...

Hey, we don't say this is good or bad. We only report what the socialist publications like Business Week print.

Cato said...

Minimum wages are a bad idea. It interferes with our right of contract. One has as much right to purchase as the other to sell labor. It makes labor's price artificially inflated.

Would you pay extra for moldy bread?

People make the wages they make for a reason and that's because some people are skilled in certain things and others are not. No need to pay unskilled hefty sums. And yes -- many if not most of those making that much are teenagers (although I would assume most teenagers make above minimum wage as most workers do).

But the Democrats will not listen and go back to raping the Constitution.

666 said...


Speed limit signs are a bad idea. They interfer with my ability to drive my car as fast as it will go. I don't think the Constitution says anything pro or con about a minimum wage.

The Constitution also uses the word "We" and not "Me." Call it what you will, but it's in the interest of the public's welfare to have a minimum wage. Bring some examples to the discussion that support your point of view.

Cato said...

666, yes the Constitution is mute, therefore the Federal government cannot say anything about it as it is forbidden from legislating outside of it's expressed powers.

States can legislate on the issue -- unlike the Congress, for if they do they are violating their oath to the Constitution and deserve to be tried for treason -- however it is bad policy. The policy of state and local government should not be to restrict worker's rights, inflating unemployment and increasing costs on goods and services on the people (including the poor). It should take a hands off approach, allowing the people to have freedom in choosing their own wage, to stop artificially increasing costs of goods and services and to keep unemployment low by not interfering in minimum wages.

666 said...


The Constitution doesn't mention that slavery is good or bad. You seem to forget that our government has a checks and balance system: legislative, judicial and executive. Obviously, the legal decision to increase the minimum wage will be voted on in the legislative branch. If the legislation gets enough votes to pass through the House and Senate, it movers to the executive branch where the President will either sign the legislation or veto it. If signed it goes into law. If vetoed, it can go back to the legislative branch where the veto could be overridden.

Once it is law, it can be challenged in the courts, i.e., the judicial branch. This would happen the constitutionality of a minimum wage comes into question. The case would work its way up through the court system to the Supreme Court. If the Supreme Court determines the minimum wage violates the Constitution then -- as determined by the current makeup of the Supreme Court -- the law would be struck down. If not, it would stand as law. Since the Constitution doesn't explicitly cover every detail that could possibly confront our nation, I believe -- and there's a couple of hundred years of US tribal knowledge to back me up on this -- the Constitution is living document that is subject to interpretation by the elected and appointed powers that be.

I think you are arguing from a laizze-faire ideological perspective that puts all its eggs in a totally free-market perspective. The checks and balances of our system of government act as a governor on our society that is not necessarily only beholding to the corporate profit interest that supports the free-market THEORY. Marxism is a theory as is democratic socialism and various others.

Personally, I don't want a totally efficient market system. I want an adult system that pays for all the costs incurred in the acquisition of capital. That includes human, environmental, material, etc., etc.

andyrand said...


You rant against the government interferring in the minimum wage, yet it must suit you fine that the courts can rule that workers for Mesaba cannot strike. You only complain about government interference when it favors coporate interests over those of workers.

Cato said...


I know the Constitution. I would like to point out that deciding the Constitutionality of Federal law was not a power given to the judiciary -- they took it. Usurped it from the people.

No, the Constitution is LAW. LAW does not change. You don't want to speed limits to be OPEN FOR INTERPRETATION do you? I'm sure you'll say they are plain in their language. Why yes, yes they are. As is the Constitution. The meaning of the laws does not change if the meaning of law changes then it is pointless to have laws and whatever "law" you have is the most vile corrupt version of "law" you could ever have. It is disturbing the amount of people the government has gotten to believe that law somehow is "living" and "changes" on a whim. That is absolutely disgusting.

Like I said, the states can legislate minimum wage, if they wish it. But it is bad policy for reasons you care not to address.

As for andy's point, I really don't care if Mesabi airlines workers go on strike. I also don't care if Mesabi fires them without any severance pay. The government shouldn't be able to stop workers from going on strike, but also shouldn't have laws protecting strikers. Their jobs are forfeit the moment they go on strike.

666 said...


I believe history has shown the Constituion is used as the basis for determining whether or not laws are consitutional.

I don't recall hearing the phrase "you borke the Constitution."