Walter Block recently spoke to the PanAm Post about those who demand a $15 per hour minimum wage and falsely believe salaries are based on employer generosity:
“This is incorrect. The correct theory of wage determination is based upon productivity of the worker,” said Block. “Why is it that a lawyer can earn $500 per hour, an accountant $200 per hour, a plumber $50 per hour, [and] a person who pushes a broom $10 per hour? Is it because of the different amounts of generosity of their employers? No, it involves productivity.”
Block claims increasing the minimum wage will lead to greater unemployment, because employers will not hire workers who are less productive than they are federally mandated to earn.
“Suppose the productivity of a worker is $10 per hour, and the minimum wage is $15 per hour. Any employer who hires him will lose money. The firm will not hire such a person. He will become unemployed. Who gains from the unemployment of relatively low skilled, low productive people? Unions who compete with them. The minimum wage is an unemployment law.”
>>it involves productivity.”
ReplyDeleteIt also involves occupational licensing. Take the government entirely out of the occupational licensing business and the lawyer would be receiving less and the sweeper would be receiving more.
Not sure the sweeper would be receiving more...
Deletethe minimum wage debate is like the most painful never ending story, its like there is a whole class of humans who's brains are just incapable of processing the concept.
ReplyDeleteit will be the year 2100 and people will still be rustling over this.
There is definitely a need to provide a different perspective on minimum wage issues. The argument that it hurts the poorest hasn't been strong enough.
ReplyDeleteLast night I ended up typing too much for these little blog comments, so I emailed what I typed to Robert, but I suspect it won't (or can't) be added here, so I posted the comment to my mostly unused blog at paulspage.com.