We have seen the future, and it sucks.

‘The Right Minimum Wage: $0.00’

17th February 2013

New York Times

Of course, that was back in 1987, when the Times had occasional flashes of being an actual newspaper rather than full-time Voice of the Crust.

The Federal minimum wage has been frozen at $3.35 an hour for six years. In some states, it now compares unfavorably even with welfare benefits available without working. It’s no wonder then that Edward Kennedy, the new chairman of the Senate Labor Committee, is being pressed by organized labor to battle for an increase.

Why would organized labor care about the minimum wage? Why, because raising it benefits union workers far more than unskilled labor:

They found that increasing the minimum wage had few statistically significant effects for unionized workers who earn well above the minimum wage. For example, United Auto Workers members in Detroit who earn $75 an hour do not usually perform work that could be done by any number of unskilled workers. But the minimum wage significantly increases the earnings of union members who compete with low-skilled workers for jobs. The researchers estimated that if the minimum wage were hiked 40 percent, unionized workers who earn between the minimum wage and twice the minimum wage could see their earnings rise between 20 and 40 percent. The evidence shows that a higher minimum wage unambiguously helps union members.

Needless to say, union members aren’t the target audience of the minimum wage. But government policy has never, ever had to account for that old bugaboo Unintended Consequences.

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