Wednesday, July 29, 2015


Here are some minimum wage data from Pew:
Perhaps surprisingly, not very many people earn minimum wage, and they make up a smaller share of the workforce than they used to. According to the Bureau of Labor Statistics, last year 1.532 million hourly workers earned the federal minimum of $7.25 an hour; nearly 1.8 million more earned less than that because they fell under one of several exemptions (tipped employees, full-time students, certain disabled workers and others), for a total of 3.3 million hourly workers at or below the federal minimum.
Yet, to look at all the attention, one would think that many more workers are involved.  The advocates of raising the minimum wage do not believe that the Law of Demand applies and that mandated increases are a free lunch. Perhaps they should ask themselves why nearly all salaried workers earn more than the law requires. (In a few cases, local mandates may be higher than the federal.)  Boosters might respond that most workers are productive enough to earn more; they might say that employers compete for their services and pay their workers just enough to keep them from leaving. They would be citing the Law of Demand, perhaps without realizing it.
Greg Mankiw points us to his review of Arthur Brooks' The Conservative Heart. Author and reviewer are addressing political candidates of the right and telling them to streamline their messages.  "... say it in thirty seconds. Extended rational argument can come later. A good first impression is crucial ..."  Short attention spans (and low levels of interest) are a fact of life so streamlined messaging is a good idea.
Just ask: why do so many people earn more than a minimum wage? Why does anyone earn more?