RE: [lpsf-discuss] How To Explain Why Letting Wages Fall Increases Employment

Dear Ron,
This is a very interesting discussion. I wonder how you might discuss the issue of minimum wages. The minimum wage was just increased from something around six dollars to something around seven dollars per hour. I think this bill was touted as a big help to the poor by our good friend Ted Kennedy. This all sounds good to me and I'm glad he is trying to help the poor. What I really don't understand is why he thinks seven dollars per hour is good enough. Why not ten dollars per hour? Why not twenty or even one hundred? He doesn't have to pay this money or even the government. The rich employer is the one who pays it so who cares?

Dear Robert;

Increasing the minimum wage only puts blocks in the way of unskilled or entry level employment. Nationally very few people are actually working at the minimum wage. As an example Wal-Mart despite all the claims against it pays its associates from $8 - $11 an hour.

Increasing the minimum wage mainly effects small local businesses who are forced to either jack up their prices to reflect the extra costs in meeting the mandated employer matching social secuirty and medicare payments plus the increased pay.
This results in either lost customers or lay offs or worse the business closing.

I wrote an op/ed for the California Libertarian party which addresses the minimum wage isuue. See it at this URL:

http://ca.lp.org/lp20060110.shtml

These articles from The Mises Institute also address the issue of minimum wage and are well worth reading:

http://www.mises.org/story/2130

http://www.mises.org/story/1991

http://www.mises.org/story/1603

This url is from Lew Rockwell with several articles on the minimum wage and its impact on employment:

http://www.google.com/custom?sa=Search&cof=LW%3A500%3BL%3Ahttp%3A%2F%2Fwww.lewrockwell.com%2Flewroc1a.gif%3BLH%3A93%3BAH%3Acenter%3BAWFID%3A65dad07a461e3427%3B&domains=lewrockwell.com&q=minimum+wage&sitesearch=lewrockwell.com

Rpn Getty
SF Libertarian