Fauxcahontas and Fuzzy Math

Prof. Jacobson at Legal Insurrection has been following the economic nonsense concerning Senator Elizabeth Warren’s claim that the minimum wage should be $22 an hour.

Let’s do some math.

There are roughy 135 million workers in the U. S. 22 bucks an hour works out to around $45,000 year, which would give a total U. S. payroll of a bit more than $6 trillion. That’s just about equal to the total of all wages and salaries paid in the country last year. In other words, in a struggling economy business would have to drastically reduce their unskilled minimum wage employment in order to have money left over to pay their skilled employees. One consequence of increasing the minimum wage is to outlaw jobs for workers with lower skills, increasing unemployment and slowing economic growth.

4 thoughts on “Fauxcahontas and Fuzzy Math

  1. One of the most striking moments for me was when a republican facetiously proposed making the minimum wage $90 an hour- and a democrat responded that that would price too many low-skill workers out of the market and wasn’t necessary. So it kinda boggles the mind: if they KNOW that’s what they’re doing, then… why the hell are they doing it? Do skilled workers somehow have a greater right to work than unskilled workers? Is there any evidence that skilled workers wouldn’t recieve the pay/promotions they deserve if unskilled workers get hired and the minimum wage is lowered?

  2. Isn’t the minimum wage used as the basis for many union contracts (minimum wage plus $30, etc.)?

  3. Even in right to work states, an employer is going to add 30% to the wage of their employees when bidding a job to take care of workman’s comp, FICA, ect in order to end up with a 10% profit on labor. If providing material for the job, they also get marked up at least 10%.

  4. A demagogue’s proposals don’t have to make economic sense. They’re intended to make the foolish people who vote for them feel good that “somebody cares”. Actual results don’t matter to the “low information voters” that demagogues rely on to stay in power, even when they get burned by them. Bad results can always be rationalized as being the fault of the evil Other.

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