Blah, blah, blah, the minimum wage ought to be $10, $21, $47, $1,000 – doesn’t matter what number they pick, they’re wrong. I always love those pronouncements about what the minimum wage ought to be. By whose reckoning ought it to be that number? Or any other number? This article in the Huffington Post tries to use increases in worker productivity to justify an increase in the minimum wage.
President Obama’s call to increase the federal minimum wage to $9 an hour was one of the more significant proposals he laid out in his

The standard textbook model of a minimum wage (price floor) set above the equilibrium wage. (Photo credit: Wikipedia)
State of the Union address Tuesday night. But $9 an hour is still a far cry from what workers really deserve, a 2012 study finds.
The minimum wage should have reached $21.72 an hour in 2012 if it kept up with increases in worker productivity, according to a March study by the Center for Economic and Policy Research. While advancements in technology have increased the amount of goods and services that can be produced in a set amount of time, wages have remained relatively flat, the study points out.
Even if the minimum wage kept up with inflation since it peaked in real value in the late 1960s, low-wage workers should be earning a minimum of $10.52 an hour, according to the study.
Between the end of World War II and the late 1960s, productivity and wages grew steadily. Since the minimum wage peaked in 1968, increases in productivity have outpaced the minimum wage growth.
The current minimum wage stands at $7.25 an hour. In 2011, more than 66 percent of Americans surveyed by the Public Religion Research Institute supported raising this figure to $10.
I love that little red herring thrown in at the end. So what? If you had asked all those people if they supported an increase in the minimum wage to $15, I’m sure they would have responded yes – or at least the economically ignorant ones would have. The fact remains that an increase in the minimum wage raises the cost of employing low-skill workers. And raising the minimum wage doesn’t necessarily make workers more productive, so employers must look for other ways to compensate. One of them is hiring fewer people. Whenever you raise the price of a good (in this case labor), consumers of that good are going to buy less of it. Which in this case means that businesses are going to higher fewer low-skill workers.
Thomas Sowell, in his excellent Basic Economics: A Common Sense Guide to the Economy
says it succinctly:
“Unfortunately, the real minimum wage is always zero, regardless of the laws, and that is the wage that many workers receive in the wake of the creation or escalation of a government mandated minimum wage, because they either lose their jobs or fail to find jobs when they enter the labor force.”