Given her views on the minimum wage, let alone on President Obama's intention to raise it, it's easy to see now why Christina Romer no longer chairs his Council of Economic Advisers.
“First, what's the argument for having a minimum wage at all,” queries Mrs. Romer in The New York Times. “Basic economics” upholds the value of “robust competition” not only in providing for fair wages but also in “preventing businesses from misbehaving.”
And raising the federal hourly minimum — as proposed from $7.25 to $9 — doesn't translate to a boost for the poor or for the economy, she writes. Most of the affected workers aren't, themselves, poor but are supplementing their family income. And the anticipated cash “flow” into the economy is more akin to a trickle.
More likely, an artificial wage hike “could harm the very people whom a minimum wage is supposed to help,” she writes.
Romer's no conservative. The economics professor at the University of California, Berkeley, helped craft the administration's abysmal $862 billion “stimulus” package. Even in her Times analysis, she concludes that the nation “could do so much better if we were willing to spend some money.” Good grief!
What's significant is that even this liberal advocate of big-government spending regards raising the minimum wage as a half-measure, at best. An economic policy premised on artificial wage manipulation is, itself, half-baked.
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