Peter Schiff on the consequences of raising the minimum wage:
– Obama’s Minimum Wage Hike “Won’t Meaningfully Help Economy” (ZeroHedge, Feb 6, 2014):
The US minimum wage has been a common news topic lately – increasing its sound and fury since President Obama’s State of the Union proclamation of a rise in federal employee minimum wages to $10.10 (from $7.25). While obviously a contentious political issue, one question keeps coming up – will this help? As BofAML notes in a recent report, a simple back-of-the-envelope calculation suggests that the rise in wages from a minimum wage increase would amount to fractions of a percentage point on macroenomic data. There simply are not enough people working at (or below, since some jobs are exempted) the minimum wage to have a noticeable impact on the total wage bill and in the end, there are just too few people, earning far too little, at the minimum wage to meaningful affect aggregate macroeconomic statistics. So why is he doing it?
In the end, there are just too few people, earning far too little, at the minimum wage to meaningful affect aggregate macroeconomic statistics
So one has to ask – if the rise in the minimum wage has begligble effects on growth or inflation and has the potential to price some out of the employment market – why is President Obama so insistent on its occurrence?