Page 22 - THE SOUTH CHINA BUSINESS JOURNAL
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aBMettienr Tihmaun m
Wage Hike
By J.D. Foster, Senior Vice President, Economic Policy Division,
and Chief Economist, US Chamber of Commerce
Mike Trout, widely regarded as the best baseball Job destruction is the outcome but obviously not
player in America, recently signed a contract for the intended goal of minimum wage advocates.
$426.5 million, a record for North American sports, Their interest first and foremost is social policy,
eclipsing after about 20 days Bryce Harper’s relatively specifically, the nation’s demonstrated responsibility
paltry $330 million contract (sorry Bryce). The federal to low-income workers and their families. In this
minimum wage has remained $7.25 an hour since 2009. regard, it’s essential to consider the options.
While Trout’s contract is more emblematic than relevant
to the debate, nevertheless it’s easy to understand the Consider the following proposed policy: The
renewed interest in raising the minimum wage. federal government would establish a minimum
income grant to low-income workers and their
The best way to raise workers’ incomes is to adopt families, the costs of said program paid for in full by
policies that help the economy prosper, such as an income tax surcharge of appropriate magnitude
improving the regulatory environment for businesses. levied on all taxpayers whose last names begin with
President Trump’s reversal of many of the Obama a vowel.
administration’s most heavy handed regulations played
a major role in pulling the U.S. economy out of the So if your family name is Adams, you pay the
doldrums experienced in previous years. Reforming the surcharge, but if it’s Wilson, you don’t. Using the
tax code to make it more growth friendly is another major membership of the House of Representatives as a
accomplishment that will pay major dividends in the guide, roughly 20 out of every 435 citizens would be
years ahead. called upon to pony up for this social policy.
A stronger economy means more jobs and higher wages If this seems unfair, then it is likely because of
for many, in contrast to a higher minimum wage which a sense that an agreed upon social policy should
means fewer jobs and higher wages for a few. Raising the be paid by everyone in society to one degree or
minimum wage involves government by fiat distorting
the marketplace in ways that benefit some, injure others,
and will generally reduce economic efficiency and future
wage gains. As to these latter effects, the magnitudes are
debated, but the direction cannot be in doubt unless one
insists on suspending the most basic laws of economics
because they are simply too politically inconvenient.
Jobs will be lost and hours reduced, often leaving
workers with less income overall, if the minimum wage
goes up. These effects will appear first as a matter of
immediate response and then, over time, as businesses
affected by the higher minimum wage find new and
better ways to use technology and capital to substitute for
their previous workers
19 AmCham South China
aBMettienr Tihmaun m
Wage Hike
By J.D. Foster, Senior Vice President, Economic Policy Division,
and Chief Economist, US Chamber of Commerce
Mike Trout, widely regarded as the best baseball Job destruction is the outcome but obviously not
player in America, recently signed a contract for the intended goal of minimum wage advocates.
$426.5 million, a record for North American sports, Their interest first and foremost is social policy,
eclipsing after about 20 days Bryce Harper’s relatively specifically, the nation’s demonstrated responsibility
paltry $330 million contract (sorry Bryce). The federal to low-income workers and their families. In this
minimum wage has remained $7.25 an hour since 2009. regard, it’s essential to consider the options.
While Trout’s contract is more emblematic than relevant
to the debate, nevertheless it’s easy to understand the Consider the following proposed policy: The
renewed interest in raising the minimum wage. federal government would establish a minimum
income grant to low-income workers and their
The best way to raise workers’ incomes is to adopt families, the costs of said program paid for in full by
policies that help the economy prosper, such as an income tax surcharge of appropriate magnitude
improving the regulatory environment for businesses. levied on all taxpayers whose last names begin with
President Trump’s reversal of many of the Obama a vowel.
administration’s most heavy handed regulations played
a major role in pulling the U.S. economy out of the So if your family name is Adams, you pay the
doldrums experienced in previous years. Reforming the surcharge, but if it’s Wilson, you don’t. Using the
tax code to make it more growth friendly is another major membership of the House of Representatives as a
accomplishment that will pay major dividends in the guide, roughly 20 out of every 435 citizens would be
years ahead. called upon to pony up for this social policy.
A stronger economy means more jobs and higher wages If this seems unfair, then it is likely because of
for many, in contrast to a higher minimum wage which a sense that an agreed upon social policy should
means fewer jobs and higher wages for a few. Raising the be paid by everyone in society to one degree or
minimum wage involves government by fiat distorting
the marketplace in ways that benefit some, injure others,
and will generally reduce economic efficiency and future
wage gains. As to these latter effects, the magnitudes are
debated, but the direction cannot be in doubt unless one
insists on suspending the most basic laws of economics
because they are simply too politically inconvenient.
Jobs will be lost and hours reduced, often leaving
workers with less income overall, if the minimum wage
goes up. These effects will appear first as a matter of
immediate response and then, over time, as businesses
affected by the higher minimum wage find new and
better ways to use technology and capital to substitute for
their previous workers
19 AmCham South China
