Wednesday, May 13, 2015

Battling the Minimum Wage with ‘Reductio ad Absurdum’

Mark Perry writes:
I would argue using reductio ad absurdum that if minimum wage proponents want to give the government the power to set minimum wages for unskilled workers, then they should likewise grant government the absurd power to set all wages, all prices, and all interest rates in the economy. On the other hand, if you think it’s absurd that the government should set all prices, wages, and interest rates in the economy, then it seems inconsistent and illogical that you think the government should set the minimum wage for unskilled workers.

Here he makes the  reductio ad absurdum:
There are thousands of different wages in the economy, here’s a list of hourly and annual wages from the BLS for more than 800 different occupations. If minimum wage proponents have faith that politicians and the government know the “best” or “optimal” minimum wage for unskilled workers, then shouldn’t that faith extend to politicians and the government determining minimum wages and perhaps maximum wages for all occupations in all industries. Note that the BLS wages are nationwide averages, and would vary around the country based on regional differences in the cost of living, so minimum wage proponents would further grant the government the power to regulate wages around the entire country. 
But then wages are just one price – the price of labor – and there are thousands, if not millions, of other prices throughout the economy. If it’s best to let politicians and the government decide on wages (minimums and maximums), then shouldn’t the enlightened policymakers also be trusted to set all prices in the economy – consumer prices, commodity prices, home prices, etc.? 


  1. Minimum wage proponents do not care about "other" workers' salaries nor do they care about logical consistency. While perfectly reasonable to me, your argument will have zero effect on them.


    1. Precisely. Minimum wage advocates can't even explain why the wage should be $X rather than $X+1, so why would they be concerned with this even more subtle argument?

  2. Minimum wage proponents reject your premise.