Should the federal government make life more difficult for low-skilled workers?
I hope everyone will emphatically say “NO!”
Heck, most people understandably will think you’re crazy for even asking such a preposterous question.
But some of those people will also think that it’s a good idea for politicians in Washington to make low-skilled workers less attractive to employers by raising the minimum wage.
I often ask such people whether they are more likely to buy a Big Mac if McDonald’s raises the price by 24 percent. They say they are less likely.
But they seem to have a blind spot when I ask them whether employers will be more likely or less likely to hire low-skilled workers when the government increases the cost of those workers by 24 percent.
I explain further in this interview for Yahoo! Finance.
The interviewer, by the way, seems to be economically illiterate.
He apparently believes that we can reduce inequality by pricing poor people out of the job market. He also blames companies for sitting on piles of cash, presumably unaware that firms only will invest if there are profitable opportunities.
At one point, I delicately state that one of his questions “betrays a certain lack of historical knowledge,” which is a polite way of saying “you’re either lying or you have no idea what you’re talking about.”