As for the money’s “going back into the economiy,” that’s what businesses do with the money, too.

Moreoever, there are many businesses which make a practice of paying one or two dollars above the minimum wage, so all those workers will also get a raise.

This is a very good thing.

2. You’re right. We can just go further into debt, rather than raising taxes.

The other part of your proposal is to pay young workers less. You admit that this might cause employers to hire younger workers in place of older ones, but the real admission here is that the work is not worth the money the employer is being required to pay! Furthermore, you want a tax subsidy to keep the older workers, so rather than paying for the minimum wage in inflation, you’d do it by increasing taxes.

I think we can find common ground in the conclusion that ignorance of the EITC as well as ignorance of the advanced EITC is a serious problem, which is exactly why I have been trying to bring the EITC to the attention of those who advocate an increase in the minimum wage. One of my more recent blog posts addresses this issue directly. To wit, Why is the Earned Income Tax Credit Such a Well Kept Secret?

Few people are aware this option exists and even fewer take advantage of it. Why? Because the largest employers are small businesses who have no clue the option exists or, if they do, don’t want to mess with it.

As to your issue: while I believe an increase in the EITC is an easier path, I don’t believe it is as effective. Since the large majority of EITC recipients receive the money in the form of a lump sum payment in April, this does not help them attain a higher standard of living during the year. Increasing the minimum wage accomplishes that.

Of course it’s important to them. But the fact that its such a small percentage is the reason its not a hot, burning issue to anyone except those who want to make some political hay.

I didn’t say that the tip income far exceeds minimum wage. I said that the minimum wage of waitstaff (and I’m being specific here because it doesn’t apply to all restaurant employees, such as dishwashers & busboys) is only $2.13 and that tips are supposed to make up the difference to bring them up to the $5.15.

That tells you all you need to know about why this isn’t a big issue. Hardly anyone makes minimum wage.

Sorry for the long post. I did not realize I wrote so much.

http://hrconservative.blogspot.com

Guess who opposes it? The Democrats, who want to make sure they can vote on every little increase and get the credit for it.

And presenting more than one side of an issue is something I take quite seriously. Very few situations are clearcut – and the minimum wage issue is certainly proof of that.

novamiddleman – you are correct about the time it takes. I started researching this about two weeks ago and writing it took several days. I actually stopped last night and wondered how people write on a deadline

As far as people staying at the minimum wage level – if the reduction in minimum wage wworkers from 2004 to 2005 can be used as an indicator, then it would appear that people do move up to a certain extent. However, I think that there are some folks who stay there – restaurant workers come to mind here.

Terry – as always – thanks! I value your opinion.

I have one additional comment on the issue at hand. Do people stay at the minimum wage level for long periods? I am assuming that most individuals would receive a raise in a short time period. This is why I view the minimum wage as a price floor or starting point that people move up from and generally do not agree with increasing it for most of the classis reasons. When people compare the minimum wage with cost of living I think the argument is flawed because the wage is a temporary starting point. I do favor a slight increase in the minimum wage due to inflation however.

I smile when reading your lower minimum wages for younger worker comment. Nothing is as simple as it seems. Death to bumper sticker soundbyte rhetoric

If you want to hear more from the economics-geek side of things, I”ve got a bunch of Economics blogs linked to on Monstrosity. Don Bordreaux of Cafe Hayek is particulary fascinated with minimum wage law of late.

I find it most interesting that you quote Rustici; I intended on taking an Econ course with him in the fall, but the class was full already two days after registration began. To say the man is a popular professor is an understatement! Tough as hell, but very popuar and very good- for we know that not all which is popular is very good; Rustici however, embodies both.

Excellent piece. The links help the story. I listened to a long story on this topic recently on NPR. Yours is better.

– Terry