by Charles Hugh Smith
Of Two Minds
“The $15 minimum wage will come out of the hides of working people eating lunch or running errands after work.”
For many, the most direct way of increasing the income of low-wage workers is to raise the minimum wage significantly. Many high-cost states have already passed legislation to raise the minimum wage to $15/hour.
Despite the official claims that inflation is near-zero, low-income workers have been pinched by stagnant wages and higher costs. Longer term, wages as a share of the nation’s GDP have been declining for decades (see chart below).
But this well-intentioned program has unintended consequences, not just for those it intends to help but for the economy as a whole. Long-time correspondent J.M. recently shared some incisive analysis of the many less-than-positive consequences of much higher minimum wages.