Minimum Wage

This opinion from Forbes is a nice discussion of the drawbacks to increasing the minimum wage. Some highlights:

• "as the price of labor (the wage rate) increases, the number of jobs will decrease, other things constant. Moreover, the decrease in employment will be greater in the long run than in the short run, as employers shift to labor-saving methods of production."
• President Obama believes that increasing the minimum wage from $7.25 to $9 "'would raise the incomes of millions of working families.' If so, why not increase the federal minimum to $100 an hour and abolish poverty?"
• "The way to create jobs and increase one’s real wage rate is not to increase the minimum wage, but to increase one’s productivity."
• "The minimum wage is popular with many voters who want to express their sympathy for the poor and who don’t recognize the unintended consequences of 'living wage' laws. Unions also support the minimum wage but out of self-interest. A hike in the legal minimum wage helps protect union jobs by reducing competition from lower-skilled workers."