Feb

10

 There's lots of discussion about raising—or not raising—the national minimum wage. Lots of arguments on both side of the issue. There's a recent analysis from the Chicago Fed which suggests that while the impact of such a change on jobs per se may not be much, it does have an impact—many small businesses close and approximately an equal number open. The conclusion was that the closures occur as an "older" management with a staid business model finds it difficult to cope with the new wage floor and shutters, while a newer entity, with a "younger" management, starts with a fresh business model that is adapted to the new reality. 

Stefan Jovanovich writes:

As is so often the case, the light from the brightest bulb blinds rather than illuminates. The point of the minimum wage is to create a higher floor above which fixed rates are calculated. David has no idea how many contracts set pay rates as a multiple of the minimum wage. He also has no idea how easy it is to offset the minimum wage raise effects by doing a speed-up. For the more modern employers that is no problem at all; for us old farts who have actually bussed dishes ourselves, that requires being a bit more of a bastard than the face we shave allows.

There used to be two choices with businesses that hired teenagers and other people with limited skills - teach or grind. Thanks to academics of proper authority there is now only one so some of us have retired permanently from teaching.
 


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