Archive for July 29th, 2009

Conventional wisdom would indicate that a minimum wage increase would help those who make very little, those who work jobs that pay minimum wage. Unfortunately, conventional wisdom does not look closely or deeply enough. The implementation of a wage minimum has an artificial effect on the cost of labor. The idea, of course, is to make sure that workers are not being taken advantage of by employers, and finding themselves working long hours but still making too little to live. The problem is, if employers cannot afford labor, they will either replace labor with technology, or do without the functions that labor would have provided in order to stay in business. It is either that, or they go out of business. Either way, the lower skilled jobs are cut out entirely, meaning that the people who depended on those jobs for some type of income find that they have no income at all. Read the rest of this entry »