Thursday, January 11, 2007

Minimum wage, minimum rage

The first increase in the federal minimum wage in a decade passed the House of Representatives on Wednesday, and both the Senate and President Bush voiced support if small businesses get tax breaks.

Democrats, who control the House for the first time since 1994, pushed through the 41 percent wage increase on a 315-116 vote in a matter of hours. All 233 Democrats voted yes, along with 82 Republicans. Under Democrats, "the little guy's not going to be forgotten any longer," said Rep. Bill Pascrell, D-N.J.

The measure would boost the wage, $5.15 an hour, to $7.25 over two years in three 70-cent increments. It would affect about 5.6 million people, or 4 percent of the workforce, and there would be ripple effects for about 7.4 million others.

The federal minimum wage was last increased in 1997, the longest gap since it was set at 25 cents in 1938. The $10,712 salary for a full-time worker has the lowest buying power in 51 years.
(source)

I am glad that the minimum wage is going up, hopefully, to $7.25 an hour. That amount is still ridiculously low, but it's better than what it is now. I don't even care if small businesses get tax breaks; after all, big businesses get more than their fair share of cuts. The idea that small businesses will suffer, though, is perhaps a misconception. The "I'm not a libertarian" libertarian Half-Sigma has explained more than once why he believes the suffering to be an illusion:
Whenever there is minimum wage talk in Congress, opponents will inevitably trot out some arch-conservative mom and pop business owner who says that he’d have to let one of his minimum wage employees go if the minimum wage were increased. I find such anecdotes extremely unbelievable. Because every single business owner faces the same salary increases, what happens is that prices are raised slightly and no one gets fired. Chances are that demand for whatever these businesses are selling doesn’t change much when the prices go up.

For those who simply don't want poor people to have money, Conservative commentator Steve Sailor notes:
Americans don't let other residents of America live on $5.15 per hour. Instead, we massively subsidize them. We pay to educate their children in public schools, give them free medical care at emergency rooms, and police their neighborhoods.

I'm not sure in what world we would or should have a private police force, and Sailer goes off on a route that even Sailer fan Half-Sigma disagrees with, but you get the idea. One way or the other, the poor have to get money to live. In a free market, shouldn't they earn that money and decide what to do with it on their own, rather than the rest of us taxpayers giving them assistance through specific government programs that inflate government bureaucracy? In the long run, a higher wage would probably save taxpayers money, and isn't that one of the goals of fiscal conservatives?

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