The minimum wage debate obscures a more significant problem in America. We don’t primarily have a wage problem. We have a money problem. Government devaluation of the dollar over the years has stolen money from average Americans. But instead of dealing with the core issue, the fight centers around wage policy and offers solutions that will just exacerbate the problems.
While we’re on the subject, a recent study by the Congressional Budget Office put a little bit of a damper on the “Fight for 15” minimum wage initiative.
Raising the minimum wage might be good politics, but it’s bad economics – despite what some economists say.
Last week, the Maryland legislature overrode the governor’s veto and adopted a $15 per hour minimum wage. It was a major victory for the “Fight for $15” crowd, but it almost certainly won’t be for low-skilled workers — at least not the ones who whose maximum wage will be $0 per hour because they cannot find jobs.
One of the biggest enduring economic myths is the notion that the minimum wage laws only help workers and have no real negative effects. The fallacy inherent in this line of thinking becomes immediately clear if we simply propose a $1,000 per hour minimum wage. After all, if $15 is good, $1,000 would be fantastic, right?
Of course, nobody would pay somebody $1,000 per hour to perform a low-skill task. It’s obviously unaffordable. A $15 per hour minimum is just as unaffordable.