During a recent interview on MSNBC, billionaire founder of Microsoft, Bill Gates, who is generally known to have liberal political leanings, surprised hosts of the program by arguing against an increase in the minimum wage.
“You have to be a bit careful that if you raise the minimum wage, you’re encouraging labor substitution, that you’re going to go buy machines and automate things or cause jobs to appear outside of that jurisdiction,” he said. “So within certain limits, you know, it doesn’t cause job destruction. But if you really start pushing it, then you’re just making a huge tradeoff. You have to say which are the households that end up benefiting. Is it much more the teenager in a wealthy household or is it that household in poverty? A lot of the problem there is that those people don’t have many hours. It’s not the actual wage level.”
In other words, raising the minimum wage to a high level means employers will cut the number of hours they give to employees, and can even cost jobs.
Simple economics.
Young workers–students with summer jobs, for instance–may be especially affected by minimum wage levels.
If you want to help the poor, you can’t do that by raising the minimum wage without reducing hours and eliminating jobs.
Take it from Bill Gates, it’s better to let the free market work unhindered, so that employees and employers can find the right balance of wages and labor.
(Via Washington Free Beacon)
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