Z, We should raise it slowly and see what the economy can take.
Well, you could increase it by 5%/year over six years. That would get us to the $7/hour figure that Kerry wanted.
One undesirable effect, however, would be inflation. It's pretty low now, but with high oil prices, very low interest rates, and a spend-happy Washington, the conditions are ripe for Carter-style stagflation. Then we'd be really hurting.
But if economic theory doesn't impress you, consider these effects:
- Lots of small businesses that rely on minimum-wage labor (or even labor that's pays a certain margin above the minimum) would go under, leaving behind the bigger corporations that can shoulder the higher costs of labor.
- The demand for illegal immigrant labor would go up tremendously, along with its associated costs to the state (health care, schooling for their children, overcrowding, and of course law enforcement and security)
And in the end, all you'll end up with is a measly $7/hour that politicians can take credit for, but that's about it.
Tenchusatsu |
