Letter to the Editor: Economics student favors increasing minimum wage

OPINION — There have been many times in history where someone was bold enough to question knowledge. Imagine where we would be without them. Where would medicine be if doctors still practiced bloodletting to cure illness? Where would physics and astonomy be if we still believed the Earth was flat and was the center of the universe? What are some of the beliefs society holds today that future generations will look back on the same way we look back on our ancestors for their beliefs?

I’m sure there are many, but the one I would like to point out is the myth that raising the minimum wage increases unemployment. Similar to the archaic belief that the Earth was the center of the universe, large corporations, right-leaning politicians and misinformed middle-class workers tend to believe the wealthy and powerful are the job creators and therefore the center of the economy. Anything we do to make them worse off will only make us worse of as well.

This idea could not be further from the truth, which is why I’ve decided to compare it to these old ideas we used to believe.

Not one of the four Utah congressmen support raising the federal minimum wage. One Utah congressman has even sought for an exemption to the $10.10/hour minimum wage required for government contractors. It has been refreshing to hear candidates challenging them – such as Charlene Albarran – show their support for raising the minimum wage.

The argument for a low or no minimum wage comes from an economic argument that wages react the same way as the price of goods and services. It’s a simple law of supply and demand. If the price of a good goes up, the market responds by purchasing less of the good. In the same context, when wages rise, employment falls.

If this were true, areas with high minimum wages should be drowning in unemployment, while areas with low minimum wages should be drowning in jobs. Seattle should be a dying city with its $12.50/hour minimum wage, and jobs should be plentiful in Charlotte, North Carolina, since minimum wage is at the federal minimum of $7.25. However, both cities have essentially the same unemployment rate of about 4.7%.

Thanks to advances in computer technology and data collection, we can use real-world data to examine the effects of raising the minimum wage scientifically. A breakthrough study done by Paul Card and Alan Krueger in 1992 looked at two adjacent counties in New Jersey and Pennsylvania.

In New Jersey, the minimum wage was raised nearly 20 percent, and it remained the same in Pennsylvania. Their results showed no negative employment effects from raising the minimum wage. There was actually evidence of a slight increase in employment.

Later studies (some of which were funded by the fast-food and hospitality industry) showed negative employment effects from increases in the minimum wage. However, when peer reviewed and closely examined, they showed obvious bias and were quickly discredited.

Card and Krueger’s study was expanded to other areas of the country in 2010 by other economists from UC Berkley, and their findings were confirmed.

In 2014, seven Nobel economists and 600 other economists wrote a letter to Congress and to President Obama urging them to raise the federal minimum wage to $10.10/hour by the beginning of 2016. Well, here we are nearly three-quarters of the way through 2016, and Congress has done nothing.

When doctors found out bloodletting wasn’t a cure for anything, they stopped. It’s time for Congress to stop the bleeding of hard working Americans and raise the minimum wage.  

Submitted by Daniel Thompson of Salt Lake City

Letters to the Editor are not the product or opinion of St. George News. The matters stated and opinions given are the responsibility of the person submitting them.

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12 Comments

  • Loyal Opposition October 1, 2016 at 9:08 am

    The jobs that receive minimum wage are usually those jobs that require little experience or skills, and little upper-level education. They are jobs that give people the opportunity to get their first-job experience or a little spending money to go out on a date. They are not jobs on which you can support a family. I take issue with this article that seems to state that no matter what the minimum wage is, there are always the same number of minimum wage jobs available. If this is indeed true, lets raise the minimum wage to $50.00 per hour, not a mere $15.00 per hour. A person really can’t support a family on $15.00 per hour either. According to this article, there would be the same number of jobs available, no matter what the wage. REDICULOUS. To get a real check on reality, just check those areas that are currently paying minimum wage such as fast food. Fast-food restaurants are currently moving to replace all of their minimum-wage workers with mechanical kiosks because they are not willing to pay the new inflated minimum wage to people when they can get a computer to do the same thing without having to worry about it calling in sick. All of those minimum-wage jobs will be eliminated. I challenge the writer of this article to explain how, when millions, or at least thousands, of minimum-wage jobs are being eliminated by computers, that the number remains the same. Again, REDICULOUS. I wish the young people, looking for their first job, or we old people, trying to augment our social security check, luck obtaining a minimum-wage job when they are being eliminated.

    • ellobo October 4, 2016 at 2:03 pm

      “Loyal opposition” You are an idiot. First you spelled ridiculous wrong. So maybe you should go back to college and then maybe you could learn how to spell and learn about economics while you are there.

      Second think of how ignorant you sound when you call minimum wage jobs just a job that requires no skill and that they are simply “first job experiences” i know a lot of good people that bust their butts and do honest work for only minimum wage because maybe they dont have the privileges that you obviously have. What about single moms who try to provide for kids and can’t afford college? Or what about people who came into this country and have to take these jobs that you look down upon because it is the only option?All the writer is proposing is that we need to increase the wage so people like this can actually have opportunities. Maybe you should read the article again.

  • Brian October 1, 2016 at 9:12 am

    Daniel, Daniel, Daniel. Please, talk down to me a bit more.

    I know you’re an “economics student”, which means you have roughly as much real world business experience as a turnip, but you are entirely unqualified to discuss this, and clearly have very limited information on the subject.

    If you really want to be informed on this subject, ask for a full refund on your education (since it clearly isn’t providing you any ROI) and use the money to start a business. Deal with all of the taxes, fees, regulations, and red tape from the government. Then, be told you have to pay them more and be faced with the decision: stop taking a paycheck yourself, reduce hours for everyone, or have less employees. You see small business owners are faced every day with this thing we like to call “math” (or if you prefer “maths”), and they don’t get to just make up numbers like the government and liberals do. They don’t get to fake it or “revise” things or do “seasonal adjustments”. If the numbers don’t add up they go out of business or to prison (depending on the approach they took to try to make things work: the honest one, or the government one).

    Then come tell me I’m a backward hick that’s into bloodletting. If you still harbor that delusion, anyway.

  • Bob October 1, 2016 at 1:39 pm

    if it weren’t for globalism we wouldn’t even need a min wage, bc we’ve sent most of our production to china and imported a huge excess of illegal alien and refugee laborers, and this has driven wages down for decades now. If you want a fair economy u put an end to globalists and the zionist banksters. The problem is that these zionists have a death grip on the world’s currencies and therefore politics as well

    • .... October 1, 2016 at 5:08 pm

      Wow I’m absolutely amazed Bob didn’t blame the Mormons for this…wow I’m going to have to mark this day down. Bob is upset with something and he didn’t blame the Mormons for it !

  • Bob October 1, 2016 at 1:44 pm

    + in the most wealthy nation to ever exist we should be able to provide living wage. back in the old days before the Roosevelt programs in the 1930s people actually did die in the streets from lack of jobs to pay for necessities–I think a lot of these libertarian types would have us go back to that

  • Roy J October 1, 2016 at 2:04 pm

    Yikes. This is a complex question that economists (students or otherwise) and business owners never seem to understand very well, because they generally only consider a part of the picture. Whether or not minimum wages (a specific sum or none at all) are good or bad is question that can only really be answered well by considering the history of wages in the United States. No easy buckets when you start down that long, long research road.

  • RealMcCoy October 1, 2016 at 2:36 pm

    Daniel,
    You are a fool, lacking basic math skills and any real world experience at running a business.
    Please change your major.
    Sincerely,
    The Real World

    • .... October 1, 2016 at 5:10 pm

      Well there are couple of restaurants looking for a dishwasher

  • ladybugavenger October 1, 2016 at 10:18 pm

    Don’t worry, if minimum wage goes up it will be balanced with higher rent, higher food prices, higher gas prices and a tax increase

    • .... October 2, 2016 at 9:44 am

      And smaller bags of Cheetos and watered down Coke and and the government will make Oklahoma part of Utah

      • ladybugavenger October 2, 2016 at 6:06 pm

        See…..everyone loses lol

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