"Many companies can recoup cost increases in the form of higher prices; because most of their customers are not poor, the net effect is to transfer money from higher-income to lower-income families."
Higher income people aren't the primary customer for McDonalds (in the US.) If you raise a Big Mac price by $2, "rich" people might buy the same amount, but poor people will buy less and poor people are a much larger share of the Big Mac market than rich people, thus it would be a net loss.
"Even if a higher minimum wage does cause some people to lose their jobs, that cost has to be balanced against the benefit of greater earnings for other low-income workers."
This is just nuts. Some guy now makes $20k per year, but some other guy now makes $0 per year, instead of both making $15,000 per year. That's a net loss of $10,000 per year in economic activity. It makes one person slightly better off, while making the other person infinitely worse off.
The other interesting thing about this debate is that those arguing for higher minimum wages also tend to advocate for unrestricted immigration and so-called sanctuary city policies which necessarily results in a greater supply of lower-skilled labor. Without a minimum wage, immigration of lower-skilled workers would necessarily regulate itself as wages fall to equilibrium. You don't even need immigration law -- the free market would limit and allow immigration as wages moved. Essentially it would make the market for labor far more liquid.
Despite the article's derisive condemnation of "Econ 101," supply and demand is still a thing. An increased supply of labor means that the equilibrium price is now lower, which with the price floor of minimum wage means that there is an even greater surplus of labor.
The article seems to criticize so-called "Econ 101" while dismissing Nobel economists Friedman and Hayek. I'm pretty sure those guys were far beyond Econ 101. The author talks about how in the 1950s 1 and 3 workers were in a union, with the implication that the higher wages that resulted were good for society. However the author conveniently leaves out that the US had a poverty rate of 22.4% in 1959 and in 2015 that poverty rate was 13.5%.
Perhaps there's an argument to be made for higher minimum wages, but this article certainly hasn't made it.
"Many companies can recoup cost increases in the form of higher prices; because most of their customers are not poor, the net effect is to transfer money from higher-income to lower-income families."
Higher income people aren't the primary customer for McDonalds (in the US.) If you raise a Big Mac price by $2, "rich" people might buy the same amount, but poor people will buy less and poor people are a much larger share of the Big Mac market than rich people, thus it would be a net loss.
"Even if a higher minimum wage does cause some people to lose their jobs, that cost has to be balanced against the benefit of greater earnings for other low-income workers."
This is just nuts. Some guy now makes $20k per year, but some other guy now makes $0 per year, instead of both making $15,000 per year. That's a net loss of $10,000 per year in economic activity. It makes one person slightly better off, while making the other person infinitely worse off.
The other interesting thing about this debate is that those arguing for higher minimum wages also tend to advocate for unrestricted immigration and so-called sanctuary city policies which necessarily results in a greater supply of lower-skilled labor. Without a minimum wage, immigration of lower-skilled workers would necessarily regulate itself as wages fall to equilibrium. You don't even need immigration law -- the free market would limit and allow immigration as wages moved. Essentially it would make the market for labor far more liquid.
Despite the article's derisive condemnation of "Econ 101," supply and demand is still a thing. An increased supply of labor means that the equilibrium price is now lower, which with the price floor of minimum wage means that there is an even greater surplus of labor.
The article seems to criticize so-called "Econ 101" while dismissing Nobel economists Friedman and Hayek. I'm pretty sure those guys were far beyond Econ 101. The author talks about how in the 1950s 1 and 3 workers were in a union, with the implication that the higher wages that resulted were good for society. However the author conveniently leaves out that the US had a poverty rate of 22.4% in 1959 and in 2015 that poverty rate was 13.5%.
Perhaps there's an argument to be made for higher minimum wages, but this article certainly hasn't made it.