Minimum Wage Ripples ( How the minimum wage hurts my daughter's chances of working )

NewsMax ^ | 11/21/2006 | Michael Arnold Glueck, M.D., and Robert J. Cihak

[Hardastarboard]

Everybody looks at the minimum wage issue as binary. Pass it and you'll raise the general price level (inflation). Don't pass it and everyone at the bottom of the ladder has a better chance at jobs, and prices don't go up.

It's a bit more complex than that. If you set the minimum wage at a rate lower than the average "low-end" wage paid by a typical employer (market rate, if you will), not much will happen to the economy. If you set it higher than that market rate, then the negative effects will occur.

Bottom line, the negative effects of the minimum wage will be felt only to the extent that they distort the market rate of wages for the lowest skilled workers. Since the average politician can't even explain how supply and demand works, don't expect them to get the subtleties of the above arguments.

[zendari]

Nothing wrong, really. But if my numbers are right 2005 inflation was about 3.4%, a bit higher than ~2.5% target.

[KeyLargo]

Small Businesses Say Wage Hike Will Cost Jobs

"(Springfield, IL) -- Small businesses and other employers who pay workers the state's minimum say a wage hike could end up hurting their employees. Several small business owners told lawmakers in Springfield a dollar-an-hour increase in the minimum wage to 7-dollars-50 an hour could cost them so much they might have to cut back, or close altogether. They say the proposed hike would cost them tens or hundreds of thousands of dollars a year. The business owners worry what planned future hikes would do as well. The Illinois General Assembly is haggling over the increase, but some now question if lawmakers will be able to pass the bill before they head home at the end of the week."