January 23, 2007
Is raising the minimum wage to $7.25 the best plan of action when unemployment can result? I’m not convinced that it’s a wise move for the benefit of society considering that lower wage workers are the most likely to be affected in the form of unemployment. Just like Hugo Chavez’s recent actions whereby the luxury taxes on boats and cars were increased, it’s the lower wage workers that suffer the most.
It’s simple economics: setting arbitrary price ceilings and floors rather than letting the market govern the price typically has less-than-desirable outcomes because of the surplus or shortage that can result. But the American Samoans know better —- they were omitted from the wage increase and they know that jobs will be lost if the minimum wage rises.
I hope the control of the American Congress was not turned over to the Democrats just for political grand-standing. As Iraq continues to spin further out of control (if that was even conceivable), I hope the Democrats work to steer this ship back on course rather than further out to sea.