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Fox News Presents Its Plan To Combat Unemployment: Cut The Minimum Wage

Reported by Ellen - January 11, 2010 -

Co-authored by Brian

On Saturday’s Forbes on Fox (1/9/10), a Fox News alert about “another 80,000 (losing) their jobs last month” was a pretext for a discussion about lowering the minimum wage. “The Forbes team has a plan to get Americans working again,” host David Asman announced cheerfully. “Cut the minimum wage!” As all but one of the panelists argued on behalf of the theory, all the proponents seemed to acknowledge that nobody could really subsist on such a wage. With video.

According to Asman, earlier in the week, Colorado had lowered the minimum wage by three cents an hour. Instead of waiting to see if that had any kind of real effect on the state’s employment statistics, most of the panel gave it the seal of approval straight away. A banner on the screen read, “Best way to create jobs? Cut the minimum wage!”

Neil Weinberg must have gotten bonus Fox points for taking a swipe at Nancy Pelosi as he extolled the plan to cut wages. "This is just basic economics you would think even Nancy Pelosi could grasp it… If you increase the price of labor, …fewer people are going to get hired."

Panelist Victoria Barrett did what Asman should have done: research. "I... looked at states that have no minimum wage or the same as the federal minimum wage," she said. "And I thought, hey, those states – and Mississippi and Tennessee are included in that bunch - should have lower unemployment rates, right? They don't. They have the same as the national average, or higher. And conversely, states that have high minimum wages, like California, are also pretty much in line with the average or lower." She reasonably concluded that the minimum wage is low enough so that it does not make a difference to employment.

That pretty much blew the whole theory out of the water. But Asman said Barrett’s statistics made “my eyes go cross.”

Nevertheless, Steve Forbes argued, “Decades ago, when they started to substantially increase the minimum wage… you had single digit unemployment among teenagers. Now, certainly, among African American teenagers, it’s gone up to 50%. Among other teenagers, way high in the double digits. It’s priced people right out of the market.”

Bill Baldwin said one solution for people with low job skills is to “repeal the minimum wage outright… It shouldn’t be against the law if your economic value is $6.00 (an hour)." Baldwin told Asman he wouldn’t mind wages of $.10 an hour “if you can get people to work for that.” And what about more skilled people who are out of work? Nobody on the panel seemed to think about them. But the implicit suggestion was that they’d be “better off” if they could earn less.

“What about dumping minimum wage altogether like Bill suggests?” Asman asked Forbes.

Forbes, who has undoubtedly never had to make ends meet on anything close to the minimum wage, declared, "It's sound economically,” though he also noted that “politically, it’s going to be just about impossible to do… It should be done but that debate was settled 70 years ago. Key is to minimize the damage that it's done now, as we started to do decades ago when we substantially raised it, and substantially increased unemployment among teenagers."

Barrett said, "I think that the reason teens aren't getting hired is demographic. If you think about it, the baby boomers are taking up a large portion of that workforce."

But Weinberg said, "People would be much happier" if we cut the wage. He added, “Most people who (earn) the minimum wage have more than one person in their home who are actually making money. So you don’t have to live on five dollars an hour.”

Maybe Weinberg should be the first person to take a pay cut and see what it's like living on minimum wage.