These quotes about Dean Baker, co-director of the Center for Economic and Policy Research, appear in this article.
"Baker joins The Daily Ticker's Aaron Task in the accompanying interview to discuss what more can be done to stimulate the economy. He believes the Federal Reserve could and should be doing more and also says raising the country's minimum wage from $7.25 an hour to almost $10 an hour would go a long way in stimulating consumer demand and jobs growth."
"A counter argument to raising the minimum wage is that employers would be less likely to hire new employees, hurting job growth. But Baker believes there is no substantial evidence to support this and says a 20 percent increase in the hourly rate might only lead to a 2 or 3 percent decline in hourly jobs."
When I read these I wonder who he is trying to fool. He won't fool a business person. Anyone with the most rudimentary understanding of economics knows that a $10 an hour minimum wage would result in countless minimum wage workers joining the ranks of the unemployed.
How high does he want the unemployment rate of young workers, especially minority young workers, to go? And does he really believe that a loss of "only" 2 or 3 percent of hourly jobs in this economy is no big deal? And how is a loss of only 2 or 3 percent of hourly jobs equivalent to jobs growth?
I'm not suggesting that one can support a family on $7.25 an hour, but he clearly has no understanding of real-world economics and how business really works. I don't think you can support a family on $10 an hour either, so why stop at $10? If he is right, then raise it even higher. Heck, let's raise it high enough to get me a raise too to see if my job becomes one of the "only" 2 or 3 percent of jobs that are lost as a result.
Minimum Wage: Raise It to $10/Hour Says Dean Baker | Daily Ticker - Yahoo! Finance
For a view differing from Baker's see this article.
"Minimum wage increases from $5.15 per hour to $7.25 an hour over a three-year period, from 2007 to 2009, particularly affected young and low-skilled Americans.
When Social Security, workers compensation, and unemployment insurance are added to the $7.25 minimum wage, the cost to the employer is about $8 an hour.
That means that employers will rationally hire only workers whose output exceeds $8 an hour. Some inexperienced young people, whom it makes sense to employ at $5.15, will not be employable at $7.25."
So do the math to figure out what it would really cost to employ at minimum wage worker at a minimum wage of $10.
How To Keep the Young Unemployed via MarketWatch
