Last week, HuffPost published an article arguing that only terrible people oppose the minimum wage. According to the Left, the best way to ensure individuals can afford to live, eat, and take care of their loved ones is by having the government force companies to pay a higher wage than economically feasible. They continue to preach this despite having economic reality slap them in the face. The minimum wage does not open the doors to a better living but rather hurts workers and increases unemployment.
Nevertheless, the memo did not reach the rocket scientists at Vox, and its Idiot-in-Chief Matt Yglesias took to Twitter today to announce his latest "genius" suggestion.
Maybe we should just go to a $150/hour minimum wage with no phase-in period and let the Fed figure out how to make it work.— Matthew Yglesias (@mattyglesias) July 3, 2017
You'd have a big burst of inflation, nobody would lose their jobs, a lot of old debts would be wiped out, and we'd be better off for it.— Matthew Yglesias (@mattyglesias) July 3, 2017
According to Yglesias, the federal government should institute this outrageously high minimum wage and force the Federal Reserve to work out the numbers, because somehow it would create higher inflation, prevent unemployment, and relieve debts. Of course, he didn't explain how any of those effects could materialize. However, he is known for not following through on many of his idiotic assertions. Instead, The Daily Wire will explain why spiking the minimum wage to such an absurd amount would do the opposite of what he suggests:
- Once the federal government changes the minimum wage law, businesses would have to alter their cost structures and their capital investments in order to comply with the law.
- Businesses would have to make a problematic decision: Would they take in more loans from banks to offset the losses into their cost structures or would they increase the prices of their products to achieve the same result? If the former, then the businesses not only would have to worry about paying the higher wage, but they would also have to deal with loan repayments. If the latter, then the businesses would run the risk of losing customers who cannot afford the higher prices for their goods.
- Businesses would also cut some of its workers, including the low-skilled workers who would not likely perform to higher standards and take on additional responsibilities.
- As a result, there would be more unemployment, higher inflation, and excessive debts to banks.
Yglesias not only bloviated the most asinine minimum wage proposal but he also qualified it by lying about the true economic costs and consequences of imposing such a policy.
Of course, he writes for Vox. so this should not come as a surprise to anyone.