Rio Grande Foundation president Paul Gessing recently explained in a 2 minute editorial for KUNM 89.9FM that raising the minimum wage actually harms the very people it is meant to help.
Interestingly enough, Santa Fe’s minimum wage will be rising to a nation’s-highest rate of $10.51 an hour in March.
Having just taken effect at the beginning of 2013, Albuquerque’s minimum wage hike is already forcing businesses to make tough decisions and resulting in worker layoffs. Check out stories here and here.
Price controls are one of the most damaging of all government interventions in the economy. The actual effects are unpredictable.
I recently had my oil changed at a quick oil change place. When I got the bill I was surprised at the higher cost and said so. The attendant said his boss said they had to pay for the new Albuquerque minimum wage somehow. And he’s right.
I hope that it does not make me appear heartless to note that two unhappy stories hardly makes a representative survey of the effects of the increase in the minimum wage. And, I note, nothing is said of the good it does for the many more people who are benefitting greatly from the increase. Has RGF included the stories that support its position and excluded that that do not? Has it made any effort at conducting an impartial survey?
That Which is Seen, and That Which is Not Seen
by Frederic Bastiat, 1850 (From the introduction.)
In the department of economy, an act, a habit, an institution, a law, gives birth not only to an effect, but to a series of effects. Of these effects, the first only is immediate; it manifests itself simultaneously with its cause – it is seen. The others unfold in succession – they are not seen: it is well for us, if they are foreseen. Between a good and a bad economist this constitutes the whole difference – the one takes account of the visible effect; the other takes account both of the effects which are seen, and also of those which it is necessary to foresee. Now this difference is enormous, for it almost always happens that when the immediate consequence is favourable, the ultimate consequences are fatal, and the converse. Hence it follows that the bad economist pursues a small present good, which will be followed by a great evil to come, while the true economist pursues a great good to come, – at the risk of a small present evil.
Unfortunately this has been a data-free argument. Did anyone actually track the impact of the minimum wage in Santa Fe? The only stats I saw during the minimum wage campaign were the overall unemployment rate in Santa Fe rather than a demographic breakdown.
Is anyone doing an authoritative tracking survey of Albuquerque business to quantify the effects on businesses and employees?
Price controls are one of the most damaging of all government interventions in the economy. The actual effects are unpredictable.
I recently had my oil changed at a quick oil change place. When I got the bill I was surprised at the higher cost and said so. The attendant said his boss said they had to pay for the new Albuquerque minimum wage somehow. And he’s right.