On Thursday, the federal minimum wage will increase to $6.55 per hour. Next July it is scheduled to go up to $7.25 per hour. CNN reports:
Rep. George Miller, a California Democrat who was one of the sponsors of the measure in the House, said up to 13 million workers benefited from the first increase under the bill, which brought the federal minimum wage to $5.85 per hour in July 2007.
Why stop there if so many people benefit? Why doesn’t Congress raise the minimum wage to, say, $100 per hour?
Maybe they’re stopping at $7.25 per hour because minimum wage laws have costs as well as benefits. And the higher the minimum wage, the higher the costs. As I wrote earlier, the unemployment rate for young people is already more than three times the national average. Making them more expensive to hire will not help.
Still, let’s assume Rep. Miller’s “13 million benefit” figure is correct. Every cent of those benefits came from the pocket of someone who was priced out of a job. Rep. Miller is no humanitarian.
A minimum wage does not create wealth. It does not make people better off on net. At best, it is a wealth transfer program that takes money from the unemployed and gives it to the employed.