The CBO came out with a report yesterday that says if the minimum age is raised to $10.10 from $7.25 that 16.5 million people will see a wage increase but ~500,000 people could lose their jobs. Which kinda begs the question in the title, do you think it's better to have fewer people working but for a higher wage? Consider that the CBO says the increased income will be about $31 billion, which is of course good, but what's the impact of that in a $15 trillion economy? AND only 19% of that increase ends up going to the families below the poverty line. Another 29% goes to those above the poverty level but less than 3 times the poverty level, so more than half goes to households making more than 3 times the poverty level. From an economic point of view, this isn't a winner IMHO. Not only from the point of view of the current situation but the impact on future growth, if you increase the cost of labor that much doesn't that hurt the risk/reward calculation for whether or not to startup a new business? When the economy is humming along like it was in the 90s, you can bump up the MW without a lot of negative impact cuz people are making buku bucks. Doesn't seem like the timing is right for a raise that big, for now anyway.
The first question is, where is this increase in wages going to come from? Does everyone assume business owners are making huge salaries off the backs of the poor? Either fewer hours will be worked, so the pay checks will stay the same, or the prices for the goods and services will increase by 40% to cover those increased wages. The trade off between automation and labor will tip further in the favor of automation. If setting a wage would eliminate poverty, why fool around? Set the wage to $20 per hour, and eliminate part time work - give everyone a $40K a year income (or $50 per hour).
If raising the minimum wage worked, then we could simply raise it to 500 an hour. It does not. Work is worth a certain amount. The profusion of government welfare jobs has people more confused than ever as to what they are worth. What do you produce? Ask yourself that. If the answer is bad, regardless of what government school degree you have, then there is a problem. Yes lawyers are nonproductive. Yes lawyers and even many doctors could be replaced with software. YEs factories are the best way to get non skilled poor productive ina hurry. No factory jobs don't have to be low paid coal mining kinda jobs. De regulating housing and letting millions work in replacable part metal house factories would make economy explode. Also installign the www.fairtax.org would help massively by eliminating 500B in tax IRS compliance costs. Each american loves to be productive. Politicians by nature are wasteful and give un earned money to thier pals. The solution is lower government spending massively and reduce restrictions aka regulations and let awesome things be produced.
When one quotes numbers out of reports like these, he or she should include all statistical information associated with them; otherwise, the numbers are absolutely meaningless. So I looked up the report and here are those numbers: Chance prediction falls within margin of error: 66.6666% Error: Around +-500,000 jobs midpoint = -500,000 jobs. So the CBO actually said that there is a 2/3 chance that there will be near zero to a million job losses. In addition, they also included a policy change to minimum wage where minimum wage is tied to the CPI. http://www.cbo.gov/publication/44995
