WHY NOT UP WAGES?
There is little evidence that increasing minimum wages significantly reduces employment of low-skilled workers or increases prices.
Much of the present “minimum-wage” analysis is guided by the “invisible hand” of the free marketplace. The problem is the analysis is incomplete and markets are not “efficient.”
In free-market theory, a worker’s wages are equal to their contribution or output. Workers reap what they sow. We also know that if an employer can pay below market price for workers, the employer may realize greater profits. Employers are motivated to maximize profits, not employee wages.
The 2007 recession displaced many “market-based” assumptions. Current minimum-wage discussions fail to address how some retail employers retain billions of dollars in profits while forcing employees to depend on taxpayer-subsidized food and health programs. That is, corporate welfare at taxpayer expense.
This is not found in textbook analysis. Employers of minimum-wage workers “game” the market and pocket profits without regard to taxpayer costs incurred per employee.
Employment/minimum wage dynamics is one of the most “studied” topics in economics.
A 2011 study estimated certain retail workers received 12.4 percent less than workers as a whole and 14.5 percent less than other retail workers.
In minimum-wage/price analysis, the study concluded if 100 percent of a wage increase were passed to consumers, it would result in a 1.1 percent increase in prices or possibly a total of $12.49 a year.
A 250-page report from the Minimum Wage Study Commission suggested in 1981 that “disemployment” from minimum wage increases was small and limited to young workers.
A pre-2007 empirical study by David Card and Alan Krueger (September 1994) suggested that increases in minimum wage did not reduce employment in fast food restaurants.
A 2013 empirical study by John Schmitt of the Center for Economic and Policy Research concludes that little or no employment response is detected to modest increases in minimum wage.
The benefits are discernible in reduced labor turnover, improved efficiency, wage compression and productivity. So a question must be asked, “Why not?”
For practical economists, the difficulty appears adapting textbook “market” analysis to real world application. Here the “invisible hand” of Adam Smith may produce a rude gesture.
SCOUT LETTERS WERE APPRECIATED
Great letters on Monday’s Viewpoint page!
I discovered I have some things in common with those fellows. I love the comics!
To the one who doesn’t like Sudoku: You are either a math wizard and it’s too easy for you, or you refuse to accept the challenge.
I for one, seldom get the numbers to line up right, but I still try. Maybe I simply don’t have sense enough to quit.
I love doing the crosswords and reading letters to the editor.
I like seeing how other folks think and I love the freedom to express our opinions. Continue taking a stand for what you believe and for what is right.
I am proud to know our next generation has many positive ideas. Go get ’em, Scouts!
OUR COUNTRY IS IN GOOD HANDS
The “Letters from Camp / Scouts’ Views” letters that appeared in the Letters to the Editor section of The Courier on Monday were proof to me that the future of our great USA is in good hands.
Keep thinking, writing and reading!
In my June 27 letter, I did not think my tongue-in-cheek remark about Bible reading would seque into a historical diatribe about the monetarism of the Hebrew nation as per Barb Rice’s letter (June 28).
Be that as it may, I never discuss religion with folks as that can cause bodily harm as well as bankruptcy.
Shucks, when King Richard got home from them Crusades he was flat broke. If he had any of them oners or ephahs in his pocket, they weren’t worth nothing in England anyway.
At least that is what it said in Robin Hood and that’s got to be true because they made a movie about it.
Besides that, Donald Trump doesn’t hire people, either. I reckon Barb Rice never saw his old TV show, because all Mr. Trump ever said was “You are fired.”