Thursday, March 28, 2024
Hawai'i Free Press

Current Articles | Archives

Friday, May 11, 2018
Inflation Making Minimum Wage Irrelevant
By Keli'i Akina PhD @ 1:54 PM :: 4286 Views :: Labor, Small Business

Ditch minimum wage, help the poor

From Grassroot Institute, May 10, 2018

Hawaii’s Legislature did not approve a higher minimum wage this year, and that’s a good thing, if you want to help the poor.

In 2010, researchers from the National Bureau of Economic Research and the Federal Reserve Board compiled the results of 53 scholarly studies into a book, “Minimum Wages” (MIT Press, 2010), with the authors concluding:

“Based on the evidence from our nearly two decades of research on minimum wages, coupled with the evidence accumulated from an impressive body of research conducted by others, we find it very difficult to see a good economic rationale for continuing to seek a higher minimum wage.”

The authors found overwhelming evidence that minimum-wage laws reduce the employment of low-skilled workers and increase the prices of goods and services.

There is “no compelling evidence that minimum wages on net help poor or low-income families, and some evidence that minimum wages adversely affect these families, and increase poverty,” they noted.

This conclusion, of course, only reinforces what economic theory already tells us, that interfering with the natural forces of supply and demand will have adverse consequences. If the cost of labor is raised above the “natural” market rate, the number of jobs will go down, or at least not increase.

With more workers applying for fewer jobs, employers naturally pick the highest-skilled workers who apply, leaving lower-skilled applicants unemployed. A mandated minimum wages thus takes away an important bargaining chip for lower-skilled workers: namely, the ability to offer to work for lower pay to compete against higher-skilled applicants.

The lesson is that instead of continuously trying to raise Hawaii’s mandatory wage floor, state policymakers should empower lower-skilled workers by removing the state’s minimum-wage laws completely, or at least leave them alone until inflation makes them irrelevant (the crime of inflation being another issue entirely).

Not only would that be smart policy, supported by both empirical research and economic theory, it also would be the right and humane thing to do.

E hana kakou (Let’s work together!), 

Keli'i Akina, Ph.D.

President/CEO 

  *   *   *   *   *

Inflation:

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

Aloha Pregnancy Care Center

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Moms for Liberty

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

MentalIllnessPolicy.org

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

No GMO Means No Aloha

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT