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March 08, 2005

On the minimum wage

Steve Chapman of the Chicago Tribune makes a useful point on the minimum wage:

Although you can force employers to pay their workers more, you can't force them to employ people. If you raise the tax on cigarettes by $2.10 a pack, people will smoke fewer cigarettes. The minimum wage functions as a tax on hiring low-wage workers, which means companies will look for ways to do without them.

Proponents of cigarette taxes understand that by artificially raising the price of cigarettes, consumers will purchase fewer packs (or turn to the black market). Yet many of these same people think the way to eradicate poverty is to increase the minimum wage. But as consumers of labor, employers act the same way to a tax increase on labor as smokers do to an increase in cigarette taxes: they buy less.

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» In Support Of The Poorest Of The Poor from Hispanic Pundit
The senate did something right: The Senate defeated dueling proposals Monday to raise the $5.15-an-hour minimum wage - one backed by organized labor, the other salted with pro-business provisions - in a day of skirmishing that reflected Republican g... [Read More]

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