Minimum wage?
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Minimum wage laws rigidify urban poverty. Picture this: You get $8.50/hr. in a town where you can buy a house for $60,000. You’re middle class, almost. You get $8.50/hr in Brooklyn, where the house next door just sold for $2,000,000 and your rent is going up to $2,000 a month. You’re homeless.
One thing that strikes me about the labor market today is the expectation that the modern worker has about someone else providing employment. “I haven’t found a job” indicates that there should be one out there, but often there is not. We live in a world where the consumer (us) wants to pay China prices for American goods, so we force our neighbor into low-wage jobs at WalMart. It never occurs to us to start our own jobs, to make our own success.
You can buy a house in many towns in New York State for under $75,000. If one uses the old rule of thumb for homeowning, you should never pay more than 5 times your annual pre-tax salary for a house. So somebody earning minimum wage, working 40 hours a week, would earn $17,680 a year. Multiply that by 5 and you get $88,400. Thus homeownership is within reach of those earning $8.50 an hour. If there are two wagearners in the home, it becomes quite possible.