Nuggets of Wisdom

Tuesday, June 17, 2014

America's Pathetic Minimum Wage?


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As midterm elections draw near, the Democrats are saber-rattling their bases with cries to raise the minimum wage, and the liberal media is more than willing to propagate their message with such news stories as this HuffPo piece on how "America Is Globally Shamed For Its Pathetic Minimum Wage":
The International Monetary Fund on Monday cut its forecast for U.S. economic growth this year, warned of sluggish growth for years to come, and made a bunch of suggestions for getting America's economic house in order -- including raising the abysmally low federal minimum wage of $7.25 an hour.

"[G]iven its current low level (compared both to U.S. history and international standards), the minimum wage should be increased," the global financial-stability group wrote in its annual assessment of state of the U.S. economy. "This would help raise incomes for millions of working poor and (help) ensure a meaningful increase in after-tax earnings for the nation’s poorest households."

The IMF didn't say how much it thought the minimum wage should be, exactly. President Barack Obama has proposed an increase to $10.10 an hour. If the minimum wage had been adjusted for inflation regularly, it would be at least $10.68, according to the National Employment Law Project. Many fast-food workers would prefer $15 an hour. If wage floors had been raised to keep up with productivity, then they would be closer to $22 an hour.

However you figure it, the wage is too low, and one of the lowest among the world's developed economies.
Yes, let’s wag our fingers at America like a puppy dog who just peed on the carpet and shame it for how low its federal minimum wage is. And to think that there are some “wingnuts” out there who believe that we should eliminate the minimum wage altogether!

Those greedy selfish sociopaths! Don’t they know that minimum wage is the only thing preventing workers from being exploited by their greedy bosses? Without it, those poor workers would be forced to slave away for mere pennies. Does America want to devolve into a third-world wasteland like the many other countries without minimum wage? Countries like Iceland, Norway, Sweden, Finland, Denmark, Austria, Germany, Italy, or Switzerland?

Oh wait! None of those countries are in the third world. In fact, those are all European countries that libtarded moonbats love to faun over. None of them have workers who are paid mere pennies. Most of them have fairly decent living standards with low unemployment.

In fact, compared to their neighbors with minimum wage laws, those countries have relatively lower unemployment rates. Scott Sumner explains:
Regarding the minimum wage, here is some data for Western Europe:

There are nine countries with a minimum wage (Belgium, Netherlands, Britain, Ireland, France, Spain, Portugal, Greece, Luxembourg).  Their unemployment rates range from 5.9% in Luxembourg to 27.6% in Greece.  The median country is France with 11.1% unemployment.

There are nine countries with no minimum wage (Iceland, Norway, Sweden, Finland, Denmark, Austria, Germany, Italy, Switzerland.)  Five of the nine have a lower unemployment rate than Luxembourg, the best of the other group.  The median country is Iceland, with a 5.5% unemployment rate. The biggest country in Europe is Germany.  No minimum wage and 5.2% unemployment.

Still want to raise our minimum wage to $10?  Germany used to have really high unemployment.  Then they did labor reforms to allow more low wage jobs, combined with subsidies for low wage workers.  Now they don’t have high unemployment.

Still want to raise our minimum wage to $10?
Huh? It’s almost as if minimum wage laws are completely irrelevant to employment or living standards. If anything, they actually lead to higher unemployment. How shameful and pathetic, indeed!