One free market/libertarian answer to unemployment and poverty is lowering the minimum wage. My question is, how the heck are people supposed to live off a lower minimum wage?
The minimum wage is already pretty low, if we lower it to say 3-4 dollars an hour, how is someone supposed to survive off that income?
Characteristics of minimum wage workers:
http://www.bls.gov/cps/minwage2011.htm
these 3.8 million workers with wages at or below the Federal minimum made up 5.2 percent of all hourly-paid workers.
Although workers under age 25 represented only about one-fifth of hourly-paid workers, they made up about half of those paid the Federal minimum wage or less
Among employed teenagers paid by the hour, about 23 percent earned the minimum wage or less, compared with about 3 percent of workers age 25 and over.
Never-married workers, who tend to be young, were more likely than married workers to earn the Federal minimum wage or less (about 9 percent versus about 2 percent).
Conclusion? The minimum wage affects the young, never married people. Not established families with children.
By creating a disemployment effect at younger years, the minimum wage prevents young workers from gaining the work experience that results in higher wages. If child labor and minimum wage laws were repealed, kids could 1) Earn some money while still with their parents so that they could start off life with a financial cushion, and 2) Gain work experience which makes them more attractive for better employment.
I'd really like to see their data. I want to do a regression analysis controlling for marital status, age, and hours worked per week. Especially since for people who work at least 40 hours of week who are paid at or below Min Wage sum to 1.7%. Older married people with children who work full time appear to be exactly NOT the demographic that works at or below min wage.
Remove other harmful things like the drug war (and consider the industry it would allow to create), and you have yourself a very likely improvement in the lives of people.
All out of http://candlemind.com/projects/progclub/file/michael/SSN.php
And from the "Costs" article above,
Robert L. Woodson (1989, p. 63) calculated that, on average, 70 cents of each dollar budgeted for government assistance goes not to the poor, but to the members of the welfare bureaucracy and others serving the poor. Michael Tanner (1996, p. 136 n. 18) cites regional studies supporting this 70/30 split. In contrast, administrative and other operating costs in private charities absorb, on average, only one-third or less of each dollar donated, leaving the other two-thirds (or more) to be delivered to recipients. Charity Navigator (www.charitynavigator.org), the newest of several private sector organizations that rate charities by various criteria and supply that information to the public on their web sites, found that, as of 2004, 70 percent of charities they rated spent at least 75 percent of their budgets on the programs and services they exist to provide, and 90 percent spent at least 65 percent. The median administrative expense among all charities in their sample was only 10.3 percent.
The government mandates and their compliance simply add to the cost of running the business. Who pays for that? The consumer does. Government mandates lower our purchasing power and increase cost.