Raising the minimum wage is presented as a solution to wealth inequality but in states that have raised the minimum wage, reality is complex. Workers in Vermont, for example, are discovering that earning more money—an extra dollar per hour—results in being scheduled for fewer hours and receiving less government assistance. In short, they continue to live in poverty despite wage increases.
Employers seem intent on operating at the same profit margins, meaning scheduling their part-time employees fewer hours once they begin earning more. Vermont's "Right to Request" law, which allows employees to request schedule changes, wasn't well understood by employees when the Atlantic's Alana Semuels visited the state.
Unpredictable working schedules hurts employees' abilities to lead stable, predictable lives. And after they begin earning a higher minimum wage, they find they become ineligible for government income that previously kept them afloat.
"Vermont’s unemployment rate, at 4.4 percent, is one of the lowest in the nation. But when people get jobs—even low-wage, part-time jobs, they lose access to subsidized housing and food stamps."
Libertarians tend to oppose minimum wage hikes for precisely these reasons. In his Big Think interview, libertarian Edward Crane, who also heads the Cato Institute in Washington D.C., argues that structural adjustments to the economy will be more effective than government subsidies at assisting the poor and needy.
Read more at the Atlantic
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