Friday, February 22, 2013

The Big Question for the President's Chief Economist

The world's greatest economic textbook salesman (and former Mitt Romney adviser) Greg Mankiw has a question for the current chairman of the White House Council of Economic Advisers. And since the current president is a Democrat and Mankiw is a Republican, the question is actually a good one:
There is one question I would like to see some reporter ask Alan Krueger, the president's chief economist: How did they decide that $9 per hour is the right level?  Why not $10 or $12 or $15 or $20?  Presumably, the president's economic team must believe that the adverse employment effects become sufficiently large at some point that further increases are undesirable.  But what calculations led them to decide that $9 strikes the right balance?


  1. $9 is/was perhaps what starting wage is at big box stores like Walmart. The goal of minimum wage is to drive the smaller competitions out of business, so the big box stores can raise retail prices and become more profitable, so they can service loans to the banksters.

    The losers in raising minimum wage are the lower middle class families, twice over:

    1. Banning all jobs paying less than $9 means that 2nd, 3rd or 4th job in the lower middle class family is now outlawed.

    2. Because the lower income families spend a higher percentage of their income on everyday retail purchases, the retail price rise due to reduced competition will disproportionately hurt the lower middle class families.

  2. If I lose my job, it's cool, you see, I'll by what I need with my EBT. Chips and soda and magazines, I'll buy them all with EBT. Lamb and veal and even brie cheese, I'll buy it all with my EBT. My EBT. My EBT.