Helping the Crap Out of the Poor

Dave Killion — March 24, 2011

Getting a job can be a real challenge, and for many poor people it is particularly so. Child care responsibilities and uncertain transportation can make punctuality difficult and limit one’s availability for work. Failure to complete high school may signal unreliability to a potential employer. Lack of work experience can suggest a lack of skills. Yet even in the face of these challenges, poor people have a competitive advantage: the willingness to start working for a wage low enough that an employer will overlook other concerns. That is, unless government takes that advantage away.  From the article –

“…  just two days after stating that her government would “focus on job creation in our province,” Premier Christy Clark announced her first major policy move, a $2.25 (28-per-cent) increase to British Columbia’s current minimum wage of $8 per hour.

“I don’t think it will cost jobs,” she stated.

If a job pays more, it’s reasonable to expect that the pool of applicants will improve in quality and that employers will face less pressure to risk hiring those folks I described above. As I understand it, if an employer has to pay more for labour, then he has less money for other things.  So if Ms. Clark doesn’t think this will cost jobs, what does she thinks it will cost?



G says

1) If it will not cost jobs and it will help the poor, why not raise the minimum wage to $15, $20, $50, $100…?
2) What makes people believe that the same force bringing wages from $8 to $10 will not also incentivize employers to bring wages from $12 to $10?
3) If you increase the pool of available workers (increase supply through fewer being employed and decrease overall market productivity through fewer being employed) and increase the cost of lower waged workers (decrease demand), won’t that put downward pressures on wages in the labour market?

Here’s the kicker – what first year economics student could not tell you the above? When you have the answer, you realize this has nothing to do with helping the poor but rather pandering to the specious and unexamined prejudices encouraged by those in power.

— March 24, 2011

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