More often than not, the media tends to hype trendy issues like minimum wage rather than actually looking at the fallout or implications from it. Roy Cordato, head of research at the John Locke Foundation, has an excellent blog post on the matter here. Here is a sampling:
With mandated employer taxes such as those required for Social Security and Medicare, at the current minimum wage wage of $7.25 per hour it costs a potential well employer over $8.00 per hour to hire a new employee. And with mandated health insurance this number will be much higher as of next year. At a $9.00 per hour minimum wage, including all other mandated labor costs, it will probably cost about $12/hour for a minimum wage employee. What this means is that everyone whose skills are such that they cannot produce more than $12.00 per hour worth of productive output will be unable to find work.
Low wages define poverty they do not cause it. Wages, like other prices, reflect underlying realities. In this case the underlying reality being reflected by low wages is that there are many people whose skills are such that they cannot command a higher wage.
Excellent points. . but not points you’ll tend to find in real news print.
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