Last week, Fox’s Bulls & Bears regular, Gary. B. Smith, called for scrapping the minimum wage. Even though it’s pretty clear that Smith – also a hedge fund manager – has not had to actually live on anything close to the minimum wage anytime lately.
“Before people on the left say, ‘My gosh, that heartless Gary Smith, how can you scrap the minimum wage?’ I went around and searched to see if any other developed country scrapped the minimum wage. In fact, Switzerland has no minimum wage. Switzerland’s unemployment rate is 3%.
So you say, ‘Well surely then they have a high poverty rate.’ No, their poverty rate is less than half of ours at 7%. Ours is about 16%. In fact, California, which has higher than the minimum wage at $8 an hour, has a 23% unemployment rate, and oh, by the way, Switzerland has the highest wealth per capita in the world. My gosh, if Switzerland can do it, doesn’t it make sense we should try it?”
Another guest, Chuck Rocha, said, “The facts are that it would lift 900,000 people out of poverty, and give 25 million Americans a raise. I realize that isn’t how corporate America works. You should be able to pay them what you want to pay them, that’s the facts, and it would be good for America.”
Regular Tracy Byrnes nodded while Smith was speaking. “We have been saying all along that raising the minimum wage hurts jobs. It doesn’t create them. I get the notion that everyone needs a starting point, but that’s what it is, it’s a starting point. You should not aspire to go to the grave making minimum wage and so we really need to get people to think big picture around here. Forget the minimum wage. Let’s get you in the door. I want my kids to be the next Steve Jobs, not the guy that makes minimum wage till death do us part.”
A recent article in Politico, by Michael Reich, a professor of economics, explains why Rocha is right.
Video below from the February 22, 2014 Bulls & Bears show.