Tags: 15 | hour | wage | economy

Minimum Wage Debate Extends Obamacare Economics to Burgers

By Michael Carr   |   Friday, 13 Dec 2013 06:36 AM

Activists have decided that all work is worth at least $15 an hour. For now, they are targeting traditional corporate enemies like Wal-Mart and McDonald's. If they succeed, the $30,000 a year guaranteed income for full-time work will have to be extended to other low wage positions like housekeepers and maintenance jobs.

The result would obviously be inflation, but economics is not a factor in the debate. Union supporters of higher wages seem to be basing their argument on social justice. Everyone deserves a living wage and someone has decided that $15 an hour sounds about right.

This effort builds on the redistribution efforts already underway with Obamacare. Under the Affordable Care Act, insurance for sick and older individuals is subsidized by the young and healthy. Because the full cost of consumer subsidies is too much, the government extends subsidies to individuals making up to four times the poverty level.

This same type of cost shifting would occur with a $15 an hour minimum wage. The middle class would be forced to pay more for groceries at Wal-Mart and sandwiches at fast food restaurants. Those who don't work full time would qualify for government subsidies that include food stamps, rent and utility payments and free cell phones.

The $15 an hour supporters do not seem to have an economic objective. They simply want the middle class to pay more for goods and services while allowing low paid workers to have more money for consumption. If they succeed, savings will continue to decline and the economy will continue to suffer from a lack of funds for long-term investments.

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