On the minimum wage.

Here’s a comment by UGA Prof. Joseph J. Sabia a Prof. at UGA as he testified before the Senate earlier this week:

Minimum wage advocates argue passionately that no one who works hard and plays by the rules should be poor. I agree, as do most Americans. But, I also agree with Milton Friedman that good intentions are not enough to make good policy. The real test of this legislation is how its passage will impact the working poor. Here the evidence is clear – past minimum wage increases have not alleviated poverty and this legislation will not do so either.

You can read his complete testimony here.

Hat Tip: Georgia Public Policy Foundation’s Friday Facts email.

14 comments

  1. ColinATL says:

    Why no countervailing quotes from all the economic experts who DO support a minimum wage increase?

    This quote just doesn’t match reality. To say that people earning the minimum wage (or less) don’t get a benefit from an increase is a joke. Just because there aren’t fewer poor people doesn’t mean that raising the minimum wage is ineffective to alleviate poverty.

    And it’s been proven time and again that raising the minimum wage does not adversely impact employment.

    So whacha got left to argue? That Wal-Mart’s stockholders will suffer? Not compelling to me.

  2. Jmac says:

    Agreed. It provides immediate assistance to folks living on those low wages (though I hope the Senate attaches some tax relief for small businesses to the final legislation).

    The bigger problem, as I see it, is that it isn’t being viewed as just one piece of a comprehensive approach to combatting poverty. Raising the minimum wage provides immediate help, but does nothing to increase opportunity and offer necessary avenues of advancement or training.

  3. Mike Hauncho says:

    It is not the business of the federal government to regulate the wages of private businesses. You can argue all you want about what it does to help the poor or not but what you fail to realize is that the government is not here to make people rich or poor or to build the middle class or anything like that. All they should do is see to it that there is a level playing field.

  4. Jmac says:

    God help me … all I can picture is Cal Naughton Jr. … it’s going to be hard to put together a counterargument against you when I keep laughing because I hear ‘you probably didn’t hear about it because I did it under the name Mike Hauncho.’

    Anyway … wouldn’t raising the minimum wage (pretty much just adjusting it, somewhat, for inflation and cost-of-living) be leveling the playing field?

  5. Mike Hauncho says:

    Leveling the playing field means that you do not give any advantages to one particular person over another, not seeing that they be paid the same (we are not socialists). What a person earns in his or her jobs should depend on the job and the qualifications of that person. Now that the minimum wage has been increased people are still going to complain that they get paid minimum wage and we will have this argument again in the future. If you dont want to get paid minimum wage then do what it takes to make you more qualified for jobs that pay more.
    ColinATL- What do Wal-Mart shareholders have to do with any of this? If a company makes millions or billions in revenue it does not mean that they should have to give more back to the employees. Making a profit is not a bad thing. Tell the small business owner who may only make a small profit that he needs to give more back. Wal-Mart takes a risk every time they open a store. Although they are good at what they do they always assume the risk of losing money so they should not be penalized if they make money. Dont get me wrong, I dont want to see people poor and hungry but there are other ways to take care of this without the government stepping in and telling private business owners how to spend their money.

  6. dingleberry says:

    THERE should DEFINITELY be a minimum wage…It should be ZERO DOLLARS AND ZERO CENTS and hour. A dude flipping burgers at McDonalds, no matter how many kids he has, doesn’t do actually deserve more than about 3 or 4 bucks an hour. Hell, our 5.25 law is already doing him a HUGE favor.

  7. Bull Moose says:

    Not only do I think the minimum wage increase was good, but I think that it’s good stimulus to the economy in a bottom up manner.

    Personally, I think that if Members of Congress are going to continually vote to increase there own pay, the least they could do is also increase the minimum wage. Otherwise, I think it looks a little hypocritical.

  8. Jmac says:

    Mike …

    Now that the minimum wage has been increased people are still going to complain that they get paid minimum wage and we will have this argument again in the future.

    … that’s why I offered this …
    The bigger problem, as I see it, is that it isn’t being viewed as just one piece of a comprehensive approach to combatting poverty. Raising the minimum wage provides immediate help, but does nothing to increase opportunity and offer necessary avenues of advancement or training.

    I’m all for raising the minimum wage, but it needs to be view as just one piece of the anti-poverty puzzle. Increased opportunities for education and training, as well as a market which offers competitive wages, is essential for long-term success.

    If a company makes millions or billions in revenue it does not mean that they should have to give more back to the employees. Making a profit is not a bad thing. Tell the small business owner who may only make a small profit that he needs to give more back.

    I wouldn’t disagree with you regarding the fact that making a profit isn’t a bad thing (it keeps our country’s economic engine running). But I would disagree with you, on a philosophical level, regarding not wishing to participate in a good revenue-sharing plan with one’s employees. The workers are the ones who do all the grunt work and lead to the company’s success, and they deserve a piece of the pie … be it a bonus or a revenue-sharing plan.

  9. GeorgiaConservative says:

    If the minimum wage works so great, why don’t we raise it to $20 or even $40 and then we can all be well off? Oh wait, you say that no one could get a job. I guess the minimum wage does cause unemployment.

  10. Mike Hauncho says:

    Jmac,

    If the market offers competitive wages then why is there a need for a minimum wage? I know there is a desire for there to be no homeless or poor people but giving them a raise is not the governments job. If a business wants to set up profit sharing or give employees a raise they can but it is no one but the company’s decision to make. You are correct that there is more that needs to be done but as long as we just give them an increase we as usual think we have solved the problem and move on. Sometimes you have to step back, deny them the temporary solution, and work for a solution to the entire problem.

  11. ColinATL says:

    GeorgiaConservative, your slippery slope argument is a joke and a red herring. I’m talking about OVERALL unemployment. Yeah, some people may get layed off at minimum wage shops like Wal-Mart, but they’ll more than likely quickly be absorbed into other parts of the economy.

    And Mike Hauncho, your free market concepts are great in principal, but without minimal regulations, they create suffering which the majority of society cannot stomach. And so the majority of society, through its government, creates the minimum wage to regulate the free market in a way that MINIMALLY impacts the overall operation of free market principles.

    And what “solution to the entire problem” do you propose? Are you saying that until you come up with a utopian fix to the problem of poverty, that no guidelines or “termporary solutions” should be countenanced? Again, the suffering created by your Social Darwinism is something most of society isn’t willing to allow.

    And by the way, the federal government is more than legally empowered to regulate a minimum wage by way of the Commerce Clause in the US Constitution.

  12. Jmac says:

    If the market offers competitive wages then why is there a need for a minimum wage? I know there is a desire for there to be no homeless or poor people but giving them a raise is not the governments job.

    With regard to this specific increase in the minimum wage, I think it’s also imperative to keep it in perspective. This isn’t a ‘living wage’ or anything, but is, more or less, an increase designed to keep up with inflation and cost of living. It’s more of a response to the fact that we do have a minimum wage and its purchasing power has been substantially diminished over time.

    One of the primary reasons you see many employers here in Georgia – and elsewhere – seeking illegal immigrant employment is because those workers are not bound by minimum wage laws. They can pay them lower wages in order for them to make more profit, which is an understandable economic motive.

    Minimum wages exist because they’re designed to provide some sort of ‘floor’ to these types of low wages. So when folks say ‘those types of jobs shouldn’t make a lot of money since they’re service jobs or entry-level positions’ my counter is that we have to consider the human element in this.

    I know that sounds like the bleeding-heart liberal in me – and it probably is – but without a minimum wage, employers would go lower with their introductory wages. And the majority of workers who earn these wages are living paycheck to paycheck, and we inadvertantly keep them trapped in this cycle.

    So I think we agree that more needs to be in a comprehensive sense, but I think that immediate things, such as raising the minimum wage, are useful for those dealing with financial hardships now. But, yes, we need to erase the mindset that simply advocating for an increase means we’ve solved the problem … because we end up being back at square one just a few short years later.

    If a business wants to set up profit sharing or give employees a raise they can but it is no one but the company’s decision to make.

    I don’t necessarily disagree with you. I was merely speaking on a philosophical level. I’d be interested to see some sort of legislation – perhaps some sort of tax relief – for businesses which set up some these type of revenue-sharing programs. That way it would be a carrot rather than a stick, and not mandate such programs.

  13. Mike Hauncho says:

    I am no expert on the subject but I think there are ways to make the situation better but we as a society tend to look for the simple solution and fail to address the entire problem. If we continue to throw money at the problem like raising the minimum wage we have done nothing to make these people more qualified to find higher paying jobs.

  14. dingleberry says:

    Homeless people, McDonald’s fry cooks, and entry level janitors are homeless, fry cooks, and janitors for a reason: THEY ARE STUPID.

    Why should we reward those in our society who do little to better themselves and little to better society. They don’t deserve our “sympathy” in the form of a wage increase.

    The minimum wage is not moral. It rewards and praises underachievement and mediocrity. Get rid of the minimum wage.

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