Thursday, August 31, 2006

Help the Poor(?), Raise Minimum Wage(?)

Michigan will soon raise its minimum wage above the national minimum wage. It will be $6.95 an hour in this state.

This is not a good idea on several levels:

During the worst presidential nightmare of my adulthood, Jimmy Carter attempted to eliminate poverty by raising minimum wage, thus artificially increasing incomes. This was a big part of the reason we had double digit inflation under that half-wit. A person's labor is only worth so much in real value and if the payments for this labor are artificially increased beyond its true worth, it simply reduces the value of the dollar.

Secondly, Michigan needs jobs period. Part of Michigan's problem (and why its unemployment rate is half-again the national rate) is that the cost of labor is just too high, especially for unskilled labor. We need to attract investors, not scare them away. Raising the cost of labor in this state is not going to encourage badly needed investments.

Finally there is this young man, Adam Folson , who is going to lose his job because his school is facing budget cuts and the increase in minimum wage is pricing him out of the picture.

His feeling is that if he is willing to work for less than minimum wage, it is nobody's business but his own. I understand the concerns this would raise, but also feel he has a valid point. It is curious to me that he resents the government in this case, but not the employer whom he feels had no choice but to let him go. (If I were his employer, and it were possible to do so, I would keep him on reduced hours, but I don't know all the circumstances and I agree that there is also a principle here.)

I also was unaware of the Adkins vs Children's Hospital decision. I am aware of it now. It has been overturned, so at the moment at least, it is little more than a historical curiousity.


Anonymous Anonymous said...

Excellent point about reducing the value of the dollar, and the Jimmy Carter example was really good also.

6:45 PM  
Blogger The WordSmith from Nantucket said...

I'm in California, and I do believe we just raised minimum wage to the highest in the country.

I am a supporter of the gubernator, but he is doing things that are pissing me off, including backing a greenhouse gas strategy.

12:07 AM  
Blogger shoprat said...

Wordsmith, welcome
I fear California may go the way of Michigan with some of the stuff going on there.

I understand Arnie's political predicament but he has to let the people of your state understand the long-term consequences of what they are doing.

2:24 PM  

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