The Complicated and Disruptive Idea of Raising the Minimum Wage

It’s complicated. Lots of things are...and we do ourselves a disservice by trying to oversimplify everything, or assuming that there's always a direct one-to-one correspondence between Act A and Result B.

We saw this with the Atkins Diet. Doctors were so sure that this was a fraud because we “knew” what caused weight gain and weight loss, that they never bothered even using the Scientific Method to test it out, until years later, just to shut people up.

And then they found out that the endocrine system was a lot more complex than they had imagined, and that Atkins was right.

There’s something similar going on with researchers discovering that being a little chubby might actually be good for your health, and certain people just not wanting to believe the data because we “know” that being fat is bad for you, and being thin is better.

I’m thinking about this now in terms of raising the minimum wage to $15/hour. A lot of people say that it’ll hurt the economy. It’ll cause massive job losses. Everyone will get acne.

But what we forget is that things are complicated. It’s not a “Do X, always get Y” proposition. There are many variables; there are many unknowns. There are many possible results, both good and bad, that we may not have seen coming. For some reason, we always seem to forget the Law of Unintended Consequences.

So...you say that raising the minimum from about $7.50 to $15 will cause massive job losses? Maybe this is true...but maybe this isn’t a bad thing. Maybe it means that one person in a family can work that $15 job for 40 hours instead of two of them working the same number of hours at $7.50. And maybe that frees the other person to go back to school…or to take care of the kids. Maybe it means that instead of both people working 40 hours a week, they can each work 20.

And maybe it’ll cause massive job losses at first. But then maybe, after all the dust settles, and there are people out there with more money to spend, more jobs will be created to go after that money. Maybe what we’ll see will be a case up trickle-up economics.

Yes, increasing the minimum wage from roughly $7.50 to $15.00 would be disruptive, but disruptive isn’t always a bad thing…it simply means that massive changes would occur from the way things are now. And if that’s the case, then maybe a little disruption every now and then isn’t a bad idea.

The automobile was disruptive. It was bad for the horse and buggy industry, but it enabled people to travel farther than they had before. The computer has been disruptive…in all of its forms, from the largest mainframes to the smallest mobile devices. It pretty much killed the typewriter industry. And yet, who among us would go back to the days before widespread computer use?

Let’s take a chance on a little positive disruption here, and see what happens if we increase people’s wages rather than cutting them. I think we might be pleasantly surprised with what happens after the dust settles.