My home state of Minnesota has raised the minimum wage, from $5.15 an hour to $6.15/hr. While chief sponsor of the bill Sen. Ellen Anderson, D-St. Paul said “$6.15 is still a barebones pay rate.“, she feels it shows that “[w]e support you. We believe everyone who works hard in our state should have the opportunity to succeed.”
The article notes criticism by Republicans that this is merely a “feel-good” vote. A local business man complained, “it’s going to make a substantial impact to our cost of doing business. What we’ll have to do is pass that along to our customers. People can only afford to pay so much for your product. You’re going to price yourself out of business.”
On May 2nd, Florida similarly increased the minimum wage to $6.15 per hour. Florida’s new minimum wage is indexed to inflation, so the state will readjust the minimum every fall. A a spokesman for the Florida Chamber of Commerce said that “such increases will result in higher prices for Floridians, which will hurt elderly people living on fixed incomes.” Apparently, the socialist group ACORN had pushed for the state’s minimum-wage law, which was enacted last year as a constitutional amendment.
That’s the background.
Asymmetrical Information had some interesting discussion on minimum wage in 2003, but little evidence was demonstrated against it.
The Heritage Foundation reviewed this topic in 2001, and noted that
A 1999 survey of small businesses by the Jerome Levy Economics Institute shows that raising the minimum wage to $6.00 per hour would cause more than 20 percent of small-business owners to reconsider their employment decisions.
The Congressional Budget Office estimates the potential job losses associated with an increase in the minimum wage to $6.65 at roughly 200,000 to 600,000 jobs.
So my question is: Is the minimum wage good for the poor (its intended recipients), or bad for them?
I have read elsewhere that the next question ought to be: If raising the minimum wage to $6.15 per hour is good for the poor, why not increase it to $50 per hour? Why not $1000/hr?