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Wednesday, June 14, 2006

Economics 101
DelaThought posts about an attempt to raise the minimum in Congress. I recall reading about a similar effort here in Delaware, but can't find it right now.

When do-gooders were concerned that too many people were enjoying themselves by smoking cigarettes, what was one of their tactics to reduce smoking? Raising the price of cigarettes through special tax increases. Why did they do that? Because people buy less of something when it's more expensive.

How are people reacting to the recent increases in gas prices? They're trying to save on gas money by driving less. Why? Because people buy less of something when it's more expensive.

Now, we're told we must raise the minimum wage to help the poor. But, as we know, people buy less of something when it's more expensive. So how will having fewer jobs help the poor?

I read an article a few weeks ago about how politicnas aren't really in the business of helping people. Rather, they're in the business of appearing to help people. Helping people won't get them re-elected if they don't get the credit, so it's more important to them to look like they are rather than actually help them. If people get helped, so much better, but that's just a happy coincidence.

The minimum wage is an example of this. It appears to help people by giving them more money. What we don't see is the people who don't get jobs, or even lose them, as a result. A low-paying job is still better than none at all, because it gives you the work experience you need to get a better one.

A simple rule government should borrow from doctors: first of all, do no harm. Raising the minimum wage will harm those who can least afford to be hurt: the poor.

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