From the Wall Street Journal today:
[Barack Obama's] proposals include tax cuts, a minimum wage increase to $9.50 by 2011, an expansion of the earned income tax credit, child care tax cuts, an expansion of after-school programs, a pledge to enact the Fair Pay Restoration Act which intends to close the pay gap between men and women, and eliminating the capital gains tax rates for small business owners, among others.
John McCain has previously voted against an increase in the minimum wage.
Conservatives generally oppose the minimum wage and point to a recent study in the UK which notes, the increase resulted in slowed hiring, reduction in hours of current employees, and increased prices at a microscopic level. At the macroscopic level there was little change. Liberals point to the same study, and not there was little effect on unemployment, which is the classical fear of the minimum wage.
I approach this problem from a completely different angle. Let's say one wants to buy a specific book and wants it in a particular period of time. There is a market price for this. More abstractly, have you ever driven down a road, and were surprised to notice that the speed limit was substantially slower or faster than you were traveling. Beyond markets themselves, there is a behavior among market participants about what things should cost, how fast one should travel, where is the best place for one to live, etc. Everyone's feelings about these are slightly different but they can be held tightly. People seek transactions which are better than the market would normally provide. They haggle, clip coupons, and buy used goods when it is practical to do so.
Someone who is a small business owner has an idea of what an employee should be paid. The conflict exists as to what to do when the government tells you your guess is wrong. The Constitution orders the government to stay out of private contracts, and for a long time this was the law. However, since the New Deal, the government has been able to make whatever regulations governing commerce it has desired, even telling farmers how much grain they could grow on their own land to feed their own cattle. Now, certainly, the government can order whatever minimum wage it wants.
I return to the small business owner who is faced with a strangling increase in labor cost. I feel the owner would be tempted to engage in the same behavior as the motorist or book-buyer above. That is, to the extent it is possible, to circumvent the market.
Black-markets exist wherever there are volitional demands for certain goods and services that have been legally prohibited and are satisfied only by methods and means condemned by law. Like moonshine during Prohibition, there is now a black-market for labor in this country. It is illegal for people to work for what many businesses are willing to pay to remain viable. Meanwhile, even less pay may be attractive to many non-natives who cannot find productive employment where they live legally. While domestic labor contemplates the hypothetical question "which would you rather have, a job at $2/hr or no job at $10/hr?", the immigrant scrambles to work for what he can get and hustles to keep it up. Economic realities that elude urban labor union aficionados are obvious to sojourners from rural Mexico accustomed to $2/day when and if they can get anything at all.
The Chattanoogan reports one such angle:
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Further, unscrupulous business owners may be tempted to utilize illegal immigrants or other black market options for employees following a minimum wage increase to avoid the choice between raising prices or reducing the size of their workforce
By raising the minimum wage Barack Obama would not be aiding the cause of woman, he would be facilitating their exploitation.