Should we raise the minimum wage? The good doctor says yes. - San Diego, California Talk Radio Station - 760 KFMB AM - 760kfmb

Should we raise the minimum wage? The good doctor says yes

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It sure must be fun to live in a fantasy land of numbers and theories.

We talked this morning with Dr. Christian Weller from the Center for American Progress. He thinks we should raise the minimum wage because companies are "sitting on oodles of cash" (his words). It's worth a listen to hear how other people think.

We ran out of time, otherwise I would have asked him how long his commute is every morning on his magic carpet and if leprechauns are cute like Sir Charms or scary like in the movie.

http://media.worldnow.com/kfmbam/podcast/the_mike_slater_show_4599.mp3

If you only have a minute to listen, check out these two sentences:

11:45, "EVERY SINGLE study that has been done seriously on the minimum wage has seen no employment effect or a positive employment effect"

I don't even know where to begin with that one. That is just an absurd thing to say. Talk to any business owner who has fired employees because of minimum wage increases.

Let's leave it to Milton Freidman:

http://www.youtube.com/watch?v=ca8Z__o52sk

How about this line from the good doctor:

14:05, "There is no evidence of [teenage unemployment going up when the minimum wage increases]. If that was the case we should have seen a boom in youth unemployment in 1995 and especially after 2000 and we didn't...The link between minimum wage and employment is just not there."

Ummm, or we could go to the Bureau of Labor Statistics from the US Department of labor, and look at the difference between teenage unemployment rate and the overall US unemployment rate. This shows that from 2006 to 2010, the "excess teenage unemployment rate" rose by 5% following a 41% increase in the minimum wage (from $5.15 to $7.25).

The black teen unemployment rate is almost 40%. Why? Because it's illegal to hire someone for less than the minimum wage (even if their experience and skills deserve only say, $5 an hour). But I mean, whatever. Fantasy land is more fun than all these facts and junk.

As Mark Perry says, "As much as politicians and other advocates of the minimum wage might pretend otherwise, the laws of supply and demand - like the law of gravity - are NOT optional."

One more thing, the good doctor says that the "vast majority" of minimum wage earners are single mothers. Is that true? Turns out, only 6.1% of minimum wage workers over the age of 24 are single mothers. And 6.3% of ALL hourly workers are single mothers. Perception is NOT reality.

So how should we raise wages? Or I should ask, how do wages increase? Henry Hazlitt wrote in Economics in One Lesson (PLEASE read the short chapter on minimum wage laws! It's FREE!):

The best way to raise wages, therefore, is to raise labor productivity. This can be done by many methods: by an increase in capital accumulation i.e., by an increase in the machines with which the workers are aided; by new inventions and improvements; by more efficient management on the part of employers; by more industriousness and efficiency on the part of workers; by better education and training. The more the individual worker produces, the more he increases the wealth of the whole community. The more he produces, the more his services are worth to consumers, and hence to employers. And the more he is worth to employers, the more he will be paid. Real wages come out of production, not out of government decrees.

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