2.
Why Not Raise It Even Higher?
If raising the minimum wage from $5.15 to $6.50 is such a good idea then why stop at a mere $6.50? After all, $10.00 or $12.00 or even $100.00 is an even more appealing wage to workers. The reason advocates of a higher minimum wage never call for a seriously large increase is because they do in fact realize that at higher wages jobs are destroyed. An increase to $12.00, for instance, announced on national television would be very appealing to those earning less than $12.00 presently. However, since at least 30% of American workers produce less than $12.00 worth of goods or services per hour on the job, this dramatic increase would mean they would report to work the next day only to find that their jobs were no longer available. Once labor starts to cost $12.00 per hour, employers will start to find ways to get the work done with fewer employees or else drop certain tasks altogether. The workers mentioned above who produce less than $12.00 in value, would find themselves no longer needed. This vast number of workers would know right away why they were suddenly unemployed and there would be political consequences for the lawmakers who had supported the increase. If an outright attack on Washington were avoided, then at least the next election would result in losses for current officeholders.
The reason politicians only raise the minimum wage in small increments (basically just a rise equal to inflation) is that they know all this. And those workers who are put out of work by the slightly higher minimum wage are not so dramatically impacted as to make it obvious to them that their unemployment is due to the minimum wage law. Additionally, those unemployed are at the lowest end of the socioeconomic scale and have virtually no political impact. These workers can be disemployed by the minimum wage law without harm to lawmakers because they generally do not vote, do not write letters-to-the-editor, do not contribute to political campaigns, and therefore do not make themselves heard by lawmakers. In other words, these people do not count politically.
So politicians can destroy the job prospects of the low-skilled while appearing to be sympathetic to their needs. This is the ugly truth about the minimum wage law. The explanation for the always-small increase in the minimum wage is political rather than economic. Lawmakers can reap the benefits of looking compassionate by raising the minimum wage; yet avoid being blamed for unemployment by not raising it too much at once.
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