Sunday, December 8, 2013

All considered, raising the minimum wage is a poor policy!







Over the past decade stats along with common sense and logic confirm and have indicated that raising the cost of labour (increasing the minimum wage) reduces employment and employment opportunities.

Further a minimum wage increase of 10% has proven to lead to an overall 5% to 6% employment reduction in employment opportunities for our teens and youth according to the U of T professor and respected economist Morley Gunderson.

Raising the minimum wage by 15%, 20% or 25% will not increase 
employment for anyone and would do them a great disservice. It further would contribute to the deterioration in the quality of our labor force.

Also higher labor costs ultimately show up in higher prices. All considered, raising the minimum wage is a poor policy.

”Should a policy be enacted that gives 10 people an extra $40 a week, but whacks the 11th girl or guy? Shouldn't the terrible disruption to the lives of those who are fired be more of a concern to us than the extra money for those who are not? Is it right to redistribute from the worse-off poor to the better-off poor?”

There are more effective ways to help the poor that do not destroy employment opportunities. Such as an earned income tax credit that gets money to the working poor or a tax subsidy for firms that hire low wage workers.

Both are without the disincentives that accompany all increased minimum wage politically expedient policies put forth by politicians as endorsed by their respective political parties and supported by their lobbyists and union contributors.

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Thanks for your thoughts, comments and opinions, will be in touch. Peter Clarke