“The minimum wage. Tonight, let’s declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty, and raise the federal minimum wage to $9 an hour. This single step would raise the incomes of millions of working families.”
Ok, let’s declare it: No one who works full-time should have to live in poverty. If you work and you are living in poverty, we will give you enough money to get out of poverty. That’s what the Earned Income Tax Credit is. But, that’s not what government wants. They want a slice of the value so they demand to take control of poor people’s labor. Why do they want to make it illegal for someone with the ability to produce $8.90 of value to work? So, what they are really proposing is: “No one who works full-time and has the ability to produce more than $9/hour in value should have to live in poverty.” I say that we go with the original statement and drop the $9 clause. Let’s introduce some equality and say that all Americans should have the right to work no matter how much value they are able to produce.
“So, if you believe one set of literature, Obama’s plan will increase wages without reducing employment. But many labor economists think the plan has real costs.”
Wait, “think the plan has real costs”? Of course it does! Ask any person the question, “Does having the ability to work and provide for yourself and family have any value?” Then ask them: “Would you pay for such a right if you were denied it?” Every. Single. Person. that you interview would answer yes to both questions. So, if there is a real cost, where does all of the property go? There is obviously property seized so it has to be transferred somewhere, right? Luckily we can measure that:
“economist Adam Ozimek makes a smart point. According to a 2007 study by the CBO, an increase in the minimum wage to $7.25, like that eventually passed that year, would increase wages by $11 billion, of which $1.6 billion went to poor families.
By contrast, increasing the Earned Income Tax Credit for large families (as happened in the stimulus bill) and for single people would cost $2.4 billion, of which $1.4 billion would go to poor families. The EITC option costs one fifth as much to society but does about as much good for poor families. That suggests that if you want to help families escape poverty, wage subsidies are a more cost-effective option than the minimum wage.”
$11B transferred and $1.6 to poor families. Surely a large portion of that $11B transferred comes from the very poor whose work is now made illegal. So, the plan is to take billions from the very poor to transfer $1.6B to the poor.
“That suggests that if you want to help families escape poverty, wage subsidies are a more cost-effective option than the minimum wage.”
Ultimately, I guess that it just depends if “help(ing) families escape poverty” is, in fact, the goal. The proof will be in the politicians’ votes.