Friday, April 22, 2016

Donald Trump's New Insane Minimum Wage Theory

His theory is that he is going to make the American economy so great that no one would even consider working for a minimum wage rate, so, therefore, raising the minimum wage is not necessary.

Trump, who once complained that wages are “too high,” told conservative radio host Joe Pags last weekend that he opposes a minimum wage increase because, under his tax plan, everyone will get job offers and America will no longer be “a Third World country.”

“We’re going to bring so many jobs back that the minimum wage, even at the higher number, will be not such a good number, people are going to make more than that,” he said.

“That’s not a lot either, in all fairness,” he added. “But we’re going to bring jobs back so much and so many that the minimum wage will hopefully be a figure that people won’t want to think about.”

Of course, if the minimum wage is below the actual market wage for low-wage earners, from a technical perspective you wouldn't worry about having a minimum wage at that level. For example, a US minimum wage of 10 cents per hour wouldn't have any practical impact on the economy,

If Trump somehow believes that he can raise the marginal productivity of the lowest skilled workers in the US above $15 per hour, he shouldn't have concern about raising the minimum wage to that level.

Of course, this Trump theory is sheer madness, since he is talking about implementing protectionist trade measures that will lower everyone's standard of living.


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