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Article Comments ...
Is Thinking Now Obsolete?

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8/7/2014 -  PKT, Los Angeles, CA writes ...
Is Thinking Now Obsolete?
      Post to Main Thread   Reply to PKT

Thinking must be obsolete at least in Sowell's case because he offers an incomplete picture. Switzerland doesn't have a statutory minimum wage but and this is a big BUT the country is heavily unionized with worker organizations negotiating to set wages across industries. As a result the effective minimum wage in Switzerland is about $15 an hour. Workers have a voice and advocacy groups that push for wages, benefits, etc. It's no wonder Switzerland has a strong middle class.

In America, which has a statutory minimum wage, it hasn't been raised in years and has fallen behind the rate of inflation. The minimum wage of today has less buying power than when the wage was instituted at the mid-century mark. So the question arises why have a minimum wage? If the reason is to provide a wage floor then it needs to be raised because that floor has dropped. If the minimum wage is dropped would the free market lead to an increase or would employers simply cut wages as far as they could knowing there will always be someone willing to take the job?

The other side of the coin is minimum wage workers tend to put all of their earnings back into the economy. A lower wage means less money for those workers to spend which in turn hurts small businesses where much of that money goes. Again using Europe as an example strong unions protect workers but in anti-union America there are no powerful worker advocates so the lower income workers without minimum wage protection would be at the mercy of employers who would seek to pay the least amount if not forced by government.

Sowell's knee jerk reaction without looking into the broader implications shows his own thinking is skewed by a partisan mindset.


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