Member-only story
Why Biden’s Minimum Wage Plan Will Fail.
I voted for Joe. I like Joe. I like what Joe’s trying to do by raising the minimum wage. But doing things that might have worked in the 1970’s ignores just how much and how quickly the foundation of our economy has, and is, changing.
It’s year Two Thousand Twenty-One folks.
Raising the minimum wage as an approach to mitigating income and wealth inequality is a 20th Century solution to a 21st Century Problem. It will not work. In fact, it will result in making the problem worse.
Why?
The simple answer is that the exponential growth in the capacity for machine labour (computers, robots, AI, etc) to displace human labour is rendering more and more segments of the workforce uncompetitive.
This would be a good thing if it were not for the fact that our socioeconomic paradigm is still back in the days when the substitutes for human labour were mostly horses and oxen.
Check any first-year textbook in Microeconomics and you’ll encounter a section on the supply/demand curve of labour in a perfectly competitive market. It might make your brain hurt to read it but in the end, it’ll seem to you that it must make sense because, after all, some smart economist wrote it.