I would like to think that I have a heart and detest the fact that there are millions of people living in poverty in our nation. This said, basic economics is less a function of what is one’s heart than what is in one’s head.
The number of people living in poverty in America is now approaching a 50 year high. That fact is certainly regrettable but President Obama’s call to increase the minimum wage is not the answer to this problem.
I am sure that many people with big hearts would think that if only those greedy companies raised the minimum wage to a somewhat respectable level, that some of this poverty might be alleviated.
Simplistic thinking of that sort might sound good in a State of the Union address but it would certainly not pass muster in any legitimate Principles of Economics 101 seminars.
Let’s go to class and listen to renowned economist Milton Friedman who lays out the basics of minimum wage economics in less than 4 minutes:
Political pandering may work in Washington but ignorance is no excuse for putting forth proposals that have been refuted for decades.