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Title:
Economic reactions develop over time
Author:
Keith Edwards
Date:
9/11/2007
Year:
2007
Article:
Editor, The Macomb Daily:
 
In his Sept. 2 column, "Corporate myths keep workers in the crosshairs," Chad Selweski writes that he was daydreaming in fantasyland when he dreamed of the unemployment that should have been accompanied by Michigan's minimum wage increase. He was indeed, but not in the "Mythology of the Minimum Wage."
 
If Selweski thinks that clear economic indicators pop up within a year after an event, he does not study economics very closely. The actions that people take in the economy make take years to show an effect, such as when the Federal Reserve expands the money supply (inflation) and prices rise several years later.
 
Employers may not act immediately to extortion-type government actions such as this wage mandate, but they do eventually, especially when deciding where to locate a business. If they decide wages are too high in one state, they shun it and expand elsewhere. The loss of a future employer does not show up as a decrease in that state, but as an increase in another that might have been in the former. That is an unseen, but real unintended consequence. If employment rises in most of the country, but is flat in Michigan, leftish writers will not notice the cause-and-effect relationship.
 
He tosses in the casual comment about Wal-Mart's "low wages and anti-union policies" being the pattern. Yet consumers flock there because of the resulting low prices and are served by workers who have voluntarily taken those jobs. There is a cause and effect that even Selweski could see if he stopped daydreaming. Economic choices are made by individuals acting in their self interest, not by columnists in fantasyland.
 
Keith Edwards
Attachments:
 
 
Created at 3/4/2008 1:04 PM by www.michiganlp.org
Last modified at 3/4/2008 1:04 PM by www.michiganlp.org