I read a headline I could hardly believe this morning, and from the New York Times, no less: “The Right Minimum Wage: $0.00.” However, as soon as I could think “Amen!” I saw the dateline of January 14, 1987. It reads:
There’s a virtual consensus among economists that the minimum wage is an idea whose time has passed. Raising the minimum wage by a substantial amount would price working poor people out of the job market. A far better way to help them would be to subsidize their wages or – better yet – help them acquire the skills needed to earn more on their own. . . .
[A higher minimum wage] would increase employers’ incentives to evade the law, expanding the underground economy. More important, it would increase unemployment: Raise the legal minimum price of labor above the productivity of the least skilled workers and fewer will be hired.
If a higher minimum means fewer jobs, why does it remain on the agenda of some liberals?
Oh, how times have changed — not that the underlying nature of labor economics has changed. Can you imagine the Times publishing such an editorial now?
As explained so well by Benjamin Powell of the Independent Institute, Paul Krugman, a star of the Times, has also had choice words for the minimum wage:
In his 1998 review of a book on living wages [Krugman] wrote: “So what are the effects of increasing minimum wages? Any Econ 101 student can tell you the answer: The higher wage reduces the quantity of labor demanded, and hence leads to unemployment.”
Fast forward to this month — with a union rallying cry as a headline, “Better Pay Now” — and suddenly Krugman is an unabashed cheerleader.
Raising the minimum wage would help many Americans, and might actually be politically possible. Let’s give it a try.
The contradictory words of Krugman and the changing face of the Times speak for themselves, but I also want to share a recent video from Peter Schiff, which demonstrates how superficial these calls for a higher minimum wages really are. As the saying goes, actions speak louder than words, and in this instance people show just how interested they are in coughing up the higher prices necessary to cover higher wages.