How NOT to solve Michigan’s unemployment problem
As I point out in today’s column, the minimum-wage increase to $7.25 an hour is coming at a bad time for an economy where jobs are disappearing at a rapid rate. That, however, doesn’t stop some politicians from trying to make things worse. In Michigan, where the unemployment rate is above 15 percent, Democrats are pushing for a $10 minimum wage. The Detroit News reports that they’re trying to get their proposal on the ballot next year.
The Free Exchange blog has a sensible reaction:
Unbelievable. The state is bleeding union jobs, so it’s not clear that an increase in the minimum wage is going to do union workers much good anyway, but it will be an enormous blow to the non-union unemployed looking for any service industry job they can get. Pity the state’s immobile poor.
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David Nicklaus has covered St. Louis business for more than 25 years. His column appears three days a week on the Post-Dispatch business page. 
Yes, and the great irony is that the people (mostly Democrats) pushing for higher minimum wages claim to be concerned about the welfare of the “poor.” In fact, minimum wages and unionization improve the pay of skilled people, but at the expense of high unemployment among unskilled people.
The main difference in Michigan is that a lot of people who are somewhat skilled, but at obsolete jobs such as auto production, are now being priced out of the job market too. It’s a case of the “chickens” of misguided economic policies coming home to roost.
Minimum wage is a total economic fallacy. Who still believes in this stuff?
They should make minimum wage at least $100 per hour. How can a family survive on just 10 bucks? And they should pass a law that the high temperture today can’t be any higher than the high temperature on this day last year. And they should pass a law that everyone gets free health care. And they should pass a law that N. Korea and Iran can’t have nuclear weapons. And they should pass a law that nobody can be fired from their job, ever. And lastly, they should pass a law that says everyone gets a free lunch, without working for it, then we will all be happy.
Unfortunately, a large portion of the American population still believes that all of these variants of a “free lunch” are possible. Of course, the same folks believe that aliens steal their socks from the laundry. The only somewhat reassuring thing is that the percentage of these people who vote is lower than that of people who are more in tune with reality — although in states like Michigan that doesn’t appear to have helped much.
I’d be willing to bet that those who speak against the minimum wage earn far more than the minimum wage.
“Unbelievable” is right. But “bleeding” might be a gross understatement except perhaps for the “union” delineation. Michigan is HEMORRHAGING jobs, and I doubt seriously Lansing has a tourniquet big enough to slow the leak. Governor Granholm’s IV tree of a few high tech and medical jobs isn’t going to keep the Big Mitten on life support for long with hundreds of thousands needing to put food on the table. That is if they still have tables to put it on.
I left in April of 2008 way back when the UR was in the high single digits. I couldn’t find work to keep us in northern Michigan where we had lived for nearly twenty years. I miss Michigan, my family, my friends. But a quick trip up there in June let me see how bad it is getting. Expressways and overpasses crumbling, and why not with a family leaving every 12 minutes? They are wearing out the roads on the way out.
I wish I had an answer. I would love to come home…
Raising the minimum wage isn’t as great a thing as everyone thinks…It has a negative impact on the economy and will throw off the equilibrium wage and equilibrium quantity of labor and…oh hell with it, this guy explains it a heck of a lot better than me: http://www.mindreign.com/en/mindshare/Global-Economics/Minimum-Wage/sl35291137bp509cpp10pn1.html just and interesting theory most people should consider before supporting a raise in minimum waige