President Obama proposed a $9 federal minimum wage in his State of the Union address. Token Libertarian Girl Julie Borowski gives a short run down of why that is a terrible idea. It will increase unemployment and the cost of the minimum wage will be passed onto consumers in the form of higher prices.
The CATO Institute confirms Ms. Borowski's claims:
This study reviews the economic models used to understand minimum wage laws and examines the empirical evidence. It describes why most of the academic evidence points to negative effects from minimum wages, and discusses why some studies may produce seemingly positive results.
Some federal and state policymakers are currently considering increases in minimum wages, but such policy changes would be particularly damaging in today’s sluggish economy. Instead, federal and state governments should focus on policies that generate faster economic growth, which would generate rising wages and more opportunities for all workers.
Indeed, it is high time to simply remove the minimum wage and let the free market work without government intervention in wages.Don't forget to Like Freedom Outpost on Facebook, Google Plus, & Twitter. You can also get Freedom Outpost delivered to your Amazon Kindle device here.