Thursday, August 11, 2016

Why the Minimum Wage is Disgraceful

A Don Boudreaux letter to Aaron the Aaron:
Mr. the Aaron:
You disapprove of my approving quotation of Terry Jones who describes efforts to raise the minimum wage as “a national disgrace.”  Astonishingly (because you read CafĂ© Hayek regularly), you write as if my objection to the minimum wage springs from a sinister wish to prevent low-skilled workers from being enriched.  But you are mistaken.  My economic objection to the minimum wage is, and has always been, founded on the fact that the higher the minimum wage, the fewer and worse are the employment opportunities for low-skilled workers.  This economic reality does not disappear simply because some (although hardly all) empirical researchers into the effects of minimum wages fail – amidst the enormous size, complexity, and dynamism of the economy – to detect these negative consequences.
So, yes, I regard minimum wages as disgraceful.  They disgracefully strip low-skilled workers of a valuable bargaining chip – namely, the ability to compete for jobs by offering to work at wages below an arbitrarily set minimum.  As a means of decreasing some workers’ abilities to find employment, minimum wages are simply less sanguinary than would be a government policy of, say, chopping off all low-skilled workers’ left hands or poking out their right eyes.  Unless you believe that such overt violence against low-skilled workers would not worsen their prospects of finding employment, you should see that the veiled violence against these workers that is so sweetly called “the minimum wage” disgracefully worsens their prospects of finding employment.
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercator Center
George Mason University
The above originally appeared at Cafe Hayek.

No comments:

Post a Comment