Friday, February 28, 2014

The NYTimes and the Minimum Wage

Once again, religious zeal is replacing common sense at the NYTimes.  Today's editorial tells us that, lo and behold, businesses benefit from a higher minimum wage.  Again, the logic is compellling.  Why limit the increase to a mere $ 10.10?  What not $ 50 per hour.  Businesses could benefit even more by the logic of the NY Times editorial.

If this line of reasoning is correct, why don't we subsidize cigarette consumption?  Raising the price of cigarettes means higher consumption and more profits for cigarette makers, if you believe the economic logic offered by supporters of the minimum wage.  Maybe it's time we lowered the price of cigarettes.  That should lead to lower cigarette consumption, if you believe the economic reasoning at the NY Times.

Why not impose price minimums on everything?  Wouldn't we like to promote more education?  Why not double the tuition at all colleges?  That should not only increase the demand for college, but make those who purchase it feel better as well.  How can it get better than that?

The economic logic of raising prices in order to spur demand and make those who pay the higher price better off is intriguing economics.  One wonders why people who pursue this line of reasoning don't expand its applicability beyond just the labor market?  Maybe we can induce people to eat more fruits and vegetables by mandating higher prices for fruits and vegetables?  The NY Times is on to something.

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