A number of academic studies purport to show that a higher minimum wage has little or no effect on unemployment. That may be true in certain narrow short-term circumstances; for it to be broadly true in the long run, the facts of supply and demand would have to be other than what they are. In fact, a higher minimum wage is a barrier to employment for the young, the lightly skilled, and those who are not currently in the work force but wish to be, a wish that can be desperate indeed for those who have long been unemployed.Here's a classic bad management approach. Real studies show something other than what I want so instead I'm going to assert my opinion and call it fact. Case closed.
The scary thing is that I've come across this now and then in the real world. People really do think this way. Obviously, real labor markets do not function this way. Wages are set with a combination of bargaining power and the value of the product of labor.* Raising the minimum wage will shift the distribution of income increasing investment opportunities for producers of goods purchased by low wage workers. This in turn will increase investment in these communities, spur entrepreneurship to meet demand that is now backed by currency,** and create net jobs for this sector. Individual firms may find it harder to deal with the higher wages but the systemic effect will be a net increase.
An even more incredibly stupid assertion follow a few paragraphs down.
There is a way to increase wages while increasing overall employment, and that is to raise the demand for labor. Unfortunately for the planners and schemers in Washington, doing so requires more than simply passing a law. Higher demand for labor is the result of a growing and productive economy, which requires substantial capital investment, innovation, entrepreneurship, and — worst of all from the White House’s perspective — time. If Toyota should decide to add another factory to its U.S. operations, it will not be built overnight.When I read this I had the immediate image of a fat, cigar chomping guy sitting in a smoky country club paying cards. Well it's unfortunate that you have to starve but you see fixing things take time, you see.
This is bullshit. Capacity utilization is still well below historical capacity utilization and well below peak. (http://www.federalreserve.gov/releases/g17/current/) The industrial plant necessary for new jobs is already there sitting idle. What we lack is people with money to buy the goods this plant could produce, this just sounds more absurd and out of touch from a magazine that opposed the auto bailout and should be well aware of how many plants were shuttered just a few years ago. What does the National Review think happened to all these shut down plants? Did they get up and walk to Canada?
Then there's the standard blather about education etc. with a bunch of sniping at the Democrats over their opposition to policies without great track records. Go ahead and read the whole thing, it's worth a laugh if nothing else.
What really stand out to me, however, is that this sounds really out of touch with how modern companies do business. While there are far too many poorly run businesses that still treat labor as an expense to be aggressively cut, growing, successful business are realizing that their workforce is an asset to be invested in. A nudge, like a minimum wage increase, that will force recalcitrant business owners to review their wage practices and to really grapple with costs like turnover and efficiency gains from long term employees will probably increase the competitiveness of American businesses.
Other companies realize the systemic nature of these changes. Walmart is a great example.*** While they receive a great deal of deserved scorn for their anti-union stance they are on record as supporting a national minimum wage increase. Interestingly, they are also on record as opposing minimum wage increases at the municipal and state levels.
This isn't as contradictory as it seems to the bad business thinkers over at National Review. Walmart stores have very large catchment areas, they would be strongly negatively impacted relative to retailers located in a lower wage areas or those with smaller catchment areas which do not have to compete across jurisdictions with different minimum wage regulations. However, with a national minimum wage increase these discrepancies causing localized disadvantages won't exist. Everyone will be on an even playing field. And with its unmatched supply chain efficiency Walmart can probably generate an even greater cost advantage in a higher wage environment.
Of course, systems thinking is impossible for those with the strongly individualistic bent of the writers and editors at the National Review. However, it is the norm in large, efficient business like Walmart. This is why companies like Walmart are crushing the small and medium business owners that make up the most ideological committed portion of the right wing, people that thrive in big organizations must think and act on this level to survive while most of the managers and owners at these organizations remain committed to the idea that it is individual merit that matters and act on this assumption, both in their business decisions and in how they treat their employees. With predictable results.