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  • Econ 101: The Minimum Wage Kills Jobs

    Last week, George Mason University economics professor Daniel Klein wrote a Wall Street Journal op-ed summarizing an study he did for Econ Journal Watch: “Who is better informed about the policy choices facing the country—liberals, conservatives or libertarians? According to a Zogby International survey that I write about in the May issue of Econ Journal Watch, the answer is unequivocal: The left flunks Econ 101.”

    Some of the questions Klein et al asked included: “1) Mandatory licensing of professional services increases the prices of those services (unenlightened answer: disagree). 2) Overall, the standard of living is higher today than it was 30 years ago (unenlightened answer: disagree). 3) Rent control leads to housing shortages (unenlightened answer: disagree). 4) A company with the largest market share is a monopoly (unenlightened answer: agree). 5) Third World workers working for American companies overseas are being exploited (unenlightened answer: agree). 6) Free trade leads to unemployment (unenlightened answer: agree). 7) Minimum wage laws raise unemployment (unenlightened answer: disagree).”

    If you have any liberal friends who still have trouble wrapping their head around the fact that minimum wage laws increase unemployment, send them the video to the right from the Center for Freedom and Prosperity Foundation video titled: The Job-Killing Impact of Minimum Wage Laws. You can read Heritage’s studies on the minimum wage, here.

    Posted in Economics [slideshow_deploy]

    5 Responses to Econ 101: The Minimum Wage Kills Jobs

    1. EMJ, Boise says:

      You are insane.

    2. Andy Strum, Jamison, says:

      An employee pays taxes on his or her minimum wage. Although highly unlikely they would have a federal tax liability, state, local and Social Security taxes will be assessed. The take home pay, (after tax pay), therefore is not great. Compare this take home pay to unemployment compensation or welfare benefits. According to the IRS, all or part of unemployment benefits received in 2009 will be tax free. Welfare benefits are also tax free. The financial incentive to take a minimum wage position is not great. If eligible, someone can receive close to or possibly greater than a minimum wage by not working and collecting a benefit from the government. This is not healthy for our society. There shouldn’t be a financial incentive not to work. There is a psychological benefit and a personal satisfaction knowing that you are an asset to society instead of a drain on society. Individuals who feel different shouldn’t be rewarded for not working.

    3. Bobbie Jo says:

      I totally agree. It's only right in a free country, employees be paid what the owner can afford or sees the job worth, without government mandating government's wage.

      This infringement on the business is government abuse of it's authority, a force of removal of the rights and freedoms to conduct business and prosper. Government is only needed for safety regulations and business ethics. Not government ethics, but BUSINESS ETHICS.

      If it's done in honesty, there isn't anything wrong with prosperity.

    4. Christopher Shafer, says:

      $5.00, $4.00 or even $3.00 an hour may not seem like much, but it's better than $0.00 dollars an hour.

    5. Shirah, Oregon says:

      Having recently received an “A” in an actual university ECON 101 course, I’m happy to report that my answers to the questions you posed reflected some “enlightenment” on my part.

      Moreover, I’m relieved that my initial aversion to these same (unenlightened) claims from my left-leaning acquaintances have been validated by your article. The general rules of economics just make sense – I don’t understand how most of my generation, it seems, has gotten it all wrong.

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