University of Kentucky economist and Bluegrass Institute Board of Scholars chairman John Garen, Ph.D., will speak on the minimum wage at the monthly WROCK meeting on Wednesday at 11:30 a.m. (firstname.lastname@example.org) at The Campbell House, 1375 S. Broadway, Lexington, 40504.
The Kentucky House of Representatives passed a hugely business-unfriendly mandate by a 54-44 vote that would force the commonwealth’s small businesses to increase the minimum wage from the current $7.25 to a whopping $10.10 per hour. The state Senate is expected to kill the bill.
House Speaker Greg Stumbo, D-Prestonsburg, said the bill will “have an enormous impact on the working men and women who are doing everything they can to keep their families going on minimum wage.”
But will this measure really help or hurt low-skilled, lower-income and younger workers?
Garen will answer the question: “Does raising the minimum wage grow jobs and cut poverty?”
In a Bluegrass Beacon column on the fallacies behind proposals to hike the minimum wage, I wrote:
Supporters believe poverty would disappear like a bad dream upon awakening if employers were forced to pay higher hourly wages. Perhaps these pillow-clutchers require that sort of fairy tale to rest easy when forcing such economic nightmares upon business owners.
However, we must not allow Mr. Sandman to lull us into a dream-world where raising the price of labor will magically have zero effect on employment.
The age-old economic argument against minimum-wage mandates still holds: products and services that cost more will be purchased less. If the cost of hiring workers artificially climbs by government fiat, then less labor will be “purchased” by employers; this means more unemployment.
Yet those sent to unemployment lines as a result are the very workers politicians claim raising the minimum wage will help.