Posted on February 19, 2013
There are two ways to look at the proposal to increase the minimum wage put out by the President in his State of the Union Address.
There is the way that economists and small business owners look at it: Increasing the minimum wage makes it harder for businesses to hire workers.
Then there is the way that some on the left look at it: Only by increasing the minimum wage will you entice people off of welfare and into the workforce.
I came across that opinion listening to NPR on the radio the other day. (Don’t ask me why I was listening to NPR). A caller phoned into the Diane Rehm show and said that none of his friends would bother trying to find a job at the current minimum wage level.
If the choice is between getting paid an honest wage or sitting at home and collecting welfare (or unemployment, as the case may be), and welfare pays at or slightly below the minimum wage, why would people even bother finding a job.
And that is the crux of the problem with our economy.
Small businesses, who already have to confront higher taxes, more regulations and the pending threat of Obamacare, can’t afford to pay more in wages and hire a lot more people on one side vs. folks who face the choice of a relatively low-paying job with few benefits or a relatively comfortable welfare state existence.
In that environment, you won’t get too many people going back to work, especially for people who don’t find work to be particularly interesting or useful for their daily lives.
Illegal immigrants have no problem getting work in this country.
That’s because they are willing to work for minimum wage (or below it, in some cases). They work hard because they don’t have much of a choice. Illegal immigrants don’t have easy access to welfare benefits, so they can either get a job or go home.
And many employers would rather hire illegal immigrants than hire people who each day wonder if they would be better off at home, doing nothing.
Increasing the minimum wage to 9 dollars an hour or 15 dollars an hour won’t help get more people back to work, not as long as work so actively competes with welfare. Increasing the costs of hiring makes it harder for small businesses to hire won’t help either. The President's proposal makes minimum sense to me.