Let’s break down Bachmannomics: Federal minimum wage is $7.25 = $15,070 a year (before taxes) if you never take a day off. Without a minimum wage, an employer could pay, say, 2 people $3.75 an hour instead of one person = $7,800 a year.  To Michelle Bachmann, this is okay, because instead of one person just above the poverty line, now two people have jobs instead of one.  A particularly unscrupulous employer could hire 7 people for that same $7.25, pocket the extra quarter an hour, and then employment rates would septuple overnight!  Of course, this isn’t the way it would work in reality.  Employers wouldn’t hire more people, they would just lower the wages on existing workers as much as possible to save on labor costs. But then, why even pay people a wage at all?  Offer them food, shelter, and clothing in exchange for their labor.  We’ll reach the point at which wages approach zero but labor production increases.  I’ll call this the Bachmann Paradox.  Or you can call it serfdom.

Let’s break down Bachmannomics:

Federal minimum wage is $7.25 = $15,070 a year (before taxes) if you never take a day off.

Without a minimum wage, an employer could pay, say, 2 people $3.75 an hour instead of one person = $7,800 a year.  To Michelle Bachmann, this is okay, because instead of one person just above the poverty line, now two people have jobs instead of one.  A particularly unscrupulous employer could hire 7 people for that same $7.25, pocket the extra quarter an hour, and then employment rates would septuple overnight!  Of course, this isn’t the way it would work in reality.  Employers wouldn’t hire more people, they would just lower the wages on existing workers as much as possible to save on labor costs. But then, why even pay people a wage at all?  Offer them food, shelter, and clothing in exchange for their labor.  We’ll reach the point at which wages approach zero but labor production increases.  I’ll call this the Bachmann Paradox.  Or you can call it serfdom.

01.07.11