Charles Lane writes in the WaPo today:
Reduce the federal minimum wage. In 2007, Congress enacted a three-step increase in the minimum wage, which was then $5.15 per hour. The final installment took effect in July, raising the rate to $7.25 per hour. In the meantime, unemployment climbed from 4.7 percent to 9.5 percent.
….It was unwise to keep raising the cost of hiring them in a recession.
The minimum wage is a socialist concept designed to reduce poverty in sweatshops. But, we don’t have such conditions in the US anymore. You couldn’t hire an illegal for $5/hour these days – you don’t need minimum wage to ensure a certain minimum pay.
What is preventing willing employers from being matched with willing employees is the anachronistic minimum wage legislation. If we get rid of minimum wage, perhaps, we could get back some of those jobs lost to countries with cheaper labor markets.
