Recently Elizabeth Warren, Senator from Massachusetts, had this to say about the minimum wage.
“If we started in 1960 and we said that as productivity goes up… then the minimum wage is going to go up the same… the minimum wage today would be about $22 an hour. So my question — with the minimum wage of $7.25 per hour, what happened to the other $14? It certainly didn’t go to the workers.”
A minimum wage of $22 an hour would be great for big business. Imagine all the small businesses and start-ups that would be forced into bankruptcy if they had to pay that much to their employees. Unemployment would increase because we would be outlawing all jobs that pay under $22 an hour and the businesses that can’t afford it. The resulting lack of competition would then allow the surviving businesses to charge more for their products and services, thus driving more money into the big corporations. I think we can all agree that’s not a good thing.
As for “productivity” going up. I don’t think that the young adults sweeping floors and flipping burgers are more productive now than they were in 1960. That is not a knock on those jobs. Those jobs are very important because they give low-skilled workers the opportunity to gain skills and experience needed to attain higher paying jobs.
We should not outlaw the jobs and opportunities for people to work their way up the economic ladder. The sad thing is that even Paul Krugman agrees that a $22 an hour minimum wage would be bad. To encourage employment we should consider eliminating the minimum wage.