Work in Progress � Fox News, WashPost Pushing Cuts in Minimum Wage to Help Workers

You got to love this. Fox News and the Washington Post suggesting that perhaps; it is time to cut the minimum wage.

To quote Washington Post Editorial Board member Charles Lane:

Reduce the federal minimum wage. In 2007, Congress enacted a three-step increase in the minimum wage, which was then $5.15 per hour. The final installment took effect in July, raising the rate to $7.25 per hour. In the meantime, unemployment climbed from 4.7 percent to 9.5 percent.

I am not saying that the minimum wage increase caused this; far from it. But study after study has shown that this supposed benefit to the poor prices low-skilled workers out of entry-level jobs. It was unwise to keep raising the cost of hiring them in a recession.

Lowering the minimum wage will not only work to drive millions of more Americans into to poverty, but we are supposed to believe that this is one way in which it can be touted as a vehicle of job creation. As Firedoglake reports:

This gets to a bigger issue of corporate groups stealing the frame of "workers".

Furthermore, as the Nobel-prize winning economist Paul Krugman of the NYT states:

The belief that lower wages would raise overall employment rests on a fallacy of composition. In reality, reducing wages would at best do nothing for employment; more likely it would actually be contractionary.

Here’s how the fallacy works: if some subset of the work force accepts lower wages, it can gain jobs. If workers in the widget industry take a pay cut, this will lead to lower prices of widgets relative to other things, so people will buy more widgets, hence more employment.

But if everyone takes a pay cut, that logic no longer applies. The only way a general cut in wages can increase employment is if it leads people to buy more across the board. And why should it do that?

Dear readers, the next time Fox News or the Washington Post start putting forth ideas on how best move this country in a new direction economically; Beware: it is most likely a new angle of thought of how to best screw over the American worker even more.