Indeed all are entitled to any opinion no matter how ludicrous, but to be taken seriously one should have at least one foot firmly anchored to the real world.
Increasingly, the Herald Courier is becoming a soap box for the economically illiterate grinding their ax and spouting sanctimonious malarkey.
Case in point was last week’s post from Mr. Samek who cavalierly informed us that;
“The solution to securing entitlements is to raise the minimum wage to at least $12 and hour. Wages have to become equitable for today’s reality. The increased nominal 14 percent withheld from earnings would do much in this regard.”
It is hard to know where to begin but suffice it to say that the colossal incoherence of the above would embarrass a second grader. However the laws of economics will not be denied. Our current mandated minimum wage is $7.15 an hour and increasing it to $12/hour would represent a 68 percent increase.
So what would a business like the Herald Courier do? They could either try to pass on the increased cost by raising advertising rates on their customers, terminate their minimum wage employees or absorb the cost by reducing their profit margin.
The former will reduce demand for their services as customers go elsewhere and their competitors attempt to hold the line on price while the latter will drive away their investors and put them on the road to bankruptcy.
In plain English, as Smith, Ricardo and Mill, among others, empirically demonstrated; Labor, a factor of production, is compensated with wages; a cost of business. When the cost of this factor rises, demand for it falls and substitution in the form of mechanization rises resulting in increased unemployment.
Children instinctively and intuitively grasp basic economic concepts, such as this, as they decide daily how to spend their allowance money in the school cafeteria.
Someone alert Samek.
Tom Coffey
Herricks
