Former Rep. Ron Paul, Texas Republican, said in his weekly column that “raising the minimum wage actually harms those at the bottom of the income ladder” and raising it by “government decree” “appeals to those who do not understand economics.”
“Raising the minimum wage increases the price of labor, thus decreasing the demand for labor,” he writes. “Unskilled and inexperienced workers are the ones most often deprived of employment opportunities by increases in the minimum wage.”
President Obama and congressional Democrats have been pushing to increase the federal minimum wage from its current level of $7.25 an hour, and the White House has expressed support for proposals in Congress that would increase it to $10.10. Some states, meanwhile, have taken it on their own to set their own minimum wage levels above $7.25.
An NBC/Wall Street Journal poll from earlier this month found that 63 percent of Americans support raising the federal minimum wage to $10.10 an hour.
Still, Mr. Paul goes on to argue that “perhaps the most significant harm to low-wage earners” is caused by “the inflationist policies of the Federal Reserve.”
“When the Federal Reserve creates money, those well-connected with the political and financial elites receive the newly created money first, before general price increases have spread through the economy,” he wrote. “And most fast-food employees do not number among the well-connected.”
“By increasing unemployment, government policies like minimum wage laws only worsen inequality,” he concluded. “Those who are genuinely concerned about increasing the well-being of all Americans should support repeal of all laws, regulations, and taxes that inhibit job creation and economic mobility. Congress should also end the most regressive of all taxes, the inflation tax, by ending the Federal Reserve.”