Alarm grows over the twin problems of income inequality and wage stagnation. Income inequality increases while wages appear virtually frozen.
Many different causes create these problems, and we do not understand them all or well. Yet a rising chorus clamors to raise the minimum wage. ? But should we prescribe a remedy for a condition we do not fully comprehend?
Several hundred economists have warned publicly that unemployment might rise by half a million or more workers. This consensus is notable since, as Harry Truman observed, "If you laid all the economists end to end,? they still wouldn't reach a conclusion." Surely there is a better time to raise the minimum wage than when we are struggling to rise from the Great Recession, and labor force participation already is too low.
If you raise the price of something, demanders will demand less of it. Workers are the something, and employers are the demanders. Raise the price of labor and less labor will be demanded -- perhaps a lot less.
And make no mistake about it: The losers will be those marginal workers who cannot afford to lose. And who gets to decide? Only Solomon could decide who gets thrown out of work so that others can take home a few dollars more.
The twin troubles of income inequality and wage stagnation have other causes, and there are other, less painful, less divisive solutions. We must explore ?those other causes and solutions, and we will do so in the future.
I'm Bob Evans, and that’s my perspective.
