July 30, 2009

With friends like these...

Random mushroom picture. This has nothing to do with anything herein discussed.

Just about anytime some measure aimed at benefiting low income or working people is discussed, you can count on some "friend of the people" to argue that any effort to help them will wind up hurting them. That being the case, presumably the best way to help folks out is to really stick it to them.

That kind of thinking frequently emerges in discussions of raising the minimum wage, even though studies of previous increases have found no significant impact on job losses. Employers are often able to compensate for the increase through such things as increased productivity, reduced turnover and absenteeism, and higher worker morale. The minimum was first enacted during the Great Depression as a means of setting a base level for employee compensation.

Here's another way of looking at it. An economic recession is by definition a decline in economic activity such as spending money. Low wage workers of necessity spend more of the money they earn more quickly than those with more financial resources. The Economic Policy Institute estimates an increase in consumer spending of $5.5 billion over the next year as a result of the minimum wage increase that took place last week.

When low wage workers get a raise, the extra money doesn't collect a lot of cobwebs.

WHILE WE'RE AT IT, here's the Economic Policy Institute on what you can't buy with a minimum wage.

RECESSION RECESSING? The Federal Reserve sees signs that the recession is starting to level off, but that's cold comfort to the growing number of jobless Americans. Employment is a lagging indicator, meaning it probably won't pick up until long after the economy begins to grow again.

EARLY HUMANS were around a good while before things got really interesting. One key to innovation in early societies seems to be greater population density.



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