A Glimmer of Hope
posted in Money, Politics |Thomas Sowell tells of Chicago's city council which, by some miracle, has decided to look at minimum wage increases intellectually instead of emotionally.
Townhall.com: A Glimmer of Hope, by Thomas Sowell
I owned an actual small business for a while, and I can vouch for the math. Let's say I have 4 employees who each contribute $6 per hour to my bottom line — $24 per hour, total — and are each paid $6 per hour. If a law is passed saying I have to pay each one at least $8 per hour, and their productivity doesn't increase, do you think I'm going to be willing to lose $8 per hour, or do you think I'll lay off one of them and encourage the other three to work 33% harder?
That's a little simplistic, because in general, an employee needs to produce at least three times his salary to be worth having on the payroll. But it makes the point, which is: An increase in the minimum wage leads to a decrease in employment among minimum wage earners.
