Editorial “Myth about minimum wage” asserts:
“Businesses facing the prospect of high payroll costs are less likely to add employees and, in many cases, are forced to lay off workers when they can’t reduce expenses elsewhere.”
WATCHDOG: The falacious reasoning behind this editorial is an example of the “Tragedy of the Commons”
To the individual business owner, higher wages are an expenses and there is no way to ascertain whether individual actions will lead to more revenue and higher profits. However, to the macro economist, higher wages on limited circumstances will lead to greater consumer power, larger business revenues, and in general greater profitability and prosperity.
A survey of leading economists in 2013 by the prestigious Economics Department of the University of Chicago found that by a margin of four to one the economists favored a moderate but significant increase in minimum wages.
As of this writing the New Era editorial has not been posted. Moreover, as usual, the Lancasteronline.com web site search engine is of little benefit.
Are we to believe that a group of mostly low skilled employees receives a 37% wage increase and the rest of the working people (with better skills) get nothing? I don’t think so.
Isn’t pointing to “leading economists” a classic appeal to authority?
As for the tragedy of the commons, it occurs to me by increasing the minimum wage you are making it less likely people will work to become higher skilled. Now, THAT is a tragedy of the commons.
EDITOR: Should we appeal to ignoramuses?