Senseless in Seattle: Fantasy economics
By upping the minimum wage to a ridiculous $15 an hour, Seattle City Council has virtually guaranteed a losing hand for an untold number of workers.
Sharply higher than Washington state's $9.32, Seattle's new hourly minimum was promised by the mayor, pushed by a socialist council member and passed unanimously — in defiance of basic economics. The higher that minimum wages are, the worse unemployment will be — especially for less skilled workers — because the more costly labor is, the less there will be.
The negative consequences have been shown time and again: in 1964 by future Nobel laureate George Stigler, in February by the Congressional Budget Office's forecast of 500,000 lost jobs if the federal hourly minimum rises from $7.25 to $10.10, in March by an Express Employment Professionals study that found a higher minimum would cause 38 percent of employers to lay off workers.
Even liberal economists favoring higher minimums expect serious fallout from Seattle's stratospheric hike, according to Michael Saltsman, research director at the Employment Policies Institute. With metro Seattle's youth unemployment at 31.4 percent, the damage will be “particularly severe,” he says, noting that the political director for that socialist council member admits “there's no serious economic rationale or research behind the dollar amount.”
In other words, Seattle's $15-an-hour minimum wage is a command economics fantasy — with devastating effects for real-world workers.
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