When a professional academic economist and poverty specialist like Prof. Robert Plotnick defends a radically higher minimum wage law, as has been put in place in SeaTac, Washington, and was just enacted (with elaborate postponement/implementation periods) in Seattle, I raise an eyebrow. What am I missing?
But then I read what he actually said: “People aren’t going to stop flying out of Sea Tac [airport] because it costs a little more to buy a hamburger or a beer,” he says.
No. They won’t.
But that’s irrelevant. With prices higher for fast food, there’s certainly going to be no increase in fast food purchases. People will still go to the airport, but more often avoid the fast food joints, in SeaTac or Seattle.
And, over time, as businesses struggle with reduced revenue, or at least reduced profits, fewer of those businesses will survive. And folks with better qualifications — say, better language skills, better people skills, or a higher work ethic — will move in to the forced higher-wage area (the $15/hour minimum in both Sea Tac and Seattle is the highest city rate in the nation) and will replace less skilled workers.
Increasing poverty, not decreasing it: stultifying progress, both personal and in general.
Already the horror stories are piling up: check out the stories in the Seattle Times. (See economist David Henderson’s discussion on EconLog.)
One of the problems was inadvertently suggested by our president, who recently intoned, “Let’s declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty.”
Great. We’ll have fewer low-income workers working full time.
This is Common Sense. I’m Paul Jacob.