I’ve probably said this before – the last time we went through this – but feel that it needs to be said: there’s a reason that economists qualify their opinions with “ceteris paribus.” It means a lot of their opinions are pretty much guesswork because it’s virtually impossible to change just one thing.
The President feels that raising the minimum wage will be just the thing to raise up low-income wage earners; and that’s factually correct. It will raise the wages of those currently earning the minimum wage, and of everyone earning less than the proposed minimum wage, and of everyone whose wages are calculated on the basis of the minimum wage. We used to call that inflationary, but now it passes for social engineering.
I don’t know how much the maintenance guy and groundskeepers in my apartment complex are paid, but I’m pretty sure they’re going to be getting a raise pretty soon. The owners/investors might be willing to eat that additional expense for me – I’d appreciate that – but it’s much more likely that my rent’s about to go up, and I’m on a fixed income and I don’t see the Tea Party voting a raise for me anytime soon.
My sense is that most low-wage jobs aren’t with Fortune 500 companies. I think they’re with small-business operators with very slim profit margins, and they’re going to have to raise their prices to stay afloat. It they can’t do that, I think they’re going to have to sell out which will lead to more consolidation and job losses, but that will probably take a little while to sink in and that should work out pretty well for the Democrats in the 2014 elections. My lease is up for renewal before that.