Wednesday, July 18, 2012

Wisdom

Anybody who thinks there is no downside to raising the minimum wage lacks understanding. Higher minimum wages = fewer "entry" jobs, fewer summer jobs, more youth unemployment.

Anybody who goes to work and is still earning the minimum wage a year later is either a darn poor worker or lacks initiative. John Stossel of Fox News has an excellent article about these issues. I particularly agree with this:
Forcing employers to pay $7.25 an hour leaves them reluctant to give unskilled kids a chance -- why pay more than a worker can produce? So they offer fewer "first" jobs.
BTW, it costs an employer considerably more than the minimum wage to employ a person. This MIT article suggests the additional costs for a minimum wage, part-time employee with no benefits would equal roughly another 20% of ongoing costs. Add to this the costs of paying the person for several hours or days when they are learning and producing essentially nothing, and the costs of whoever is training the person instead of doing their own job.

Stossel also favors unpaid internships. If a young person can afford to do an unpaid internship in an area of interest instead of flipping burgers for minimum wage, that can be a real plus. Learning whether a particular career is right before spending more thousands taking courses in that field is excellent.