Thursday, August 03, 2006

Increasing Poverty AND the Minimum Wage

Looks like House Republicans delivered some shock and awe against the conservative base once again by pitching legislation that seeks to raise the federal minimum raise from $5.15 to $7.25 phased over three years. Even though House Republicans aren't acting like true conservatives, there is still hope for the local guys...in particular, one Maryland Republican Governor named Bob Ehrlich.

Thus far, Ehrlich's done a pretty good job of staying in line with conservative values, and although his opponent this year, Mayor of Baltimore Martin O'Malley, is trying his best to pander Ehrlich into being portrayed as a conservative without a heart over this whole minimum wage hike thing. It seems like Ehrlich, just may be one of the few true conservatives out there, because thus far he has resisted supporting this effort. Now we have Dan Rodricks, who from his column in the Baltimore Sun, blasts Ehrlich for not "fighting poverty" by not standing by a living wage. Then he rambles on a bunch of statistics that he thinks show the true economic implications of raising the minimum wage.

Dan, I'm no economist, but if you increase the minimum wage in a market economy, somebody is going to have to pay for it. I can tell you with great confidence that no smart employer is just going to eat that money so their employees have a sudden influx of cash. If they did that, the employees would have a lot less in their pocket when that business goes belly up because it can't afford to operate. I will tell you this: if Congress does pass this bill, employers will simply take this additional cost of labor and build it into their cost structure, therefore raising the costs of goods and services that you, me, and the poor people buy. That's what raising the minimum wage really does. On the surface it sure looks like you are fighting poverty, when all you are really doing is making the situation worse.

It's my personal hope that Ehrlich won't take this bait like his fellow Republicans did in the House. Maryland really needs true conservative leadership right now.


Blogger Kid Handsome said...

As Neal Boortz always asks - why not just raise the minimum wage to $20. I mean if it's such a good idea and all, why only $7-something.

The reality is that it isn't a good idea. All it does is create and artificial inflationary pressure (higher prices); it also increases the unemployment rates, as corporations will generally combat the minimum wage hikes by cutting staff first, then raising prices as a last resort.

Bad idea.

4:13 PM  
Anonymous Anonymous said...

The problem with the left is that they're trying to pass a higher minimum wage with arguments for a living wage--its not only dumb, but it is horrible public policy. The minimum wage is supposed to be a price floor--not an actual min wage. Sometimes I feel like going to cap hill and hitting some of these morons over the head with a frying pan hoping it will knock some sense into them.

10:24 PM  

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