Raise the Hammer

Ryan, if raising the minimum wage has zero negative effects on businesses and workers, then why don't governments ramp them way up?

Is there a point of diminishing returns, and if so, how do we know where it is? I am not against helping workers, but I don't believe there are free lunches in life. If I am wrong, and somehow minimum wages can drive growth for both businesses and workers, then I would be all for it. Either way, lets be bold and do it right, push the minimum wage up to $20/hour and see what happens.

I would offer another explanation for the robust Florida job market during the time period studied, immigration. Florida has the fourth largest immigrant population in the U.S. (~ 18.5%), and in contrast to Canada, many of the immigrants are uneducated and lack marketable skills.

Conventional thinking tells us that immigrants, especially low skilled ones, reduce the prospects for natural born workers, however, as we have been discussing recently, conventional thinking is usually misguided. In fact, countries that have strong records of allowing foreign workers into their country, also produce excellent wealth creation for their citizens. Luxembourg is a great example of this, they allow businesses to dictate how many workers they need, and they just happen to be the richest country in the world.

I have mentioned in previous posts that under Bill Clinton, spending targeted towards poor and middle class grew very slowly as compared to the current president. The crowd would tell us that that was a bad thing, however, it also led to a huge increase in real median wages. Something bad (less spending on poor people), resulted in something extremely good (great economy for all levels of income).

That is the funny thing about life, we all tend to focus on the getting the things that we think will help us, but the only way to do this is to embrace the things that scare us.