George Leef devotes his latest Forbes column to poking holes in the myth that lies behind the government-mandated minimum wage.
The driving force behind Obamacare was the absurd belief that through legislation and regulation, the government could make many healthcare consumers better off without making any of them worse off. As we are now discovering, the truth is the reverse of that – hardly anyone is better off while a great many are worse off.
Keep that in mind with regard to another statist daydream, namely the minimum wage. Advocates of having a minimum wage claim that through it, government can make many low-wage workers better off without harming anyone. The current minimum is $7.25 per hour and President Obama and his retinue of interventionists want to raise it to $10.10 per hour. That would, they reason, mean an increase of up to 39 percent for people who now earn less than that, but without any adverse effects.
If it is so easy to legislate people out of poverty, why stop at $10.10? Wouldn’t a mandated wage of, say, $20 per hour do more good, and put still more money “back into the economy”? …
… Whether or not the minimum wage is intended to stifle competition and harm people who have low productivity, it clearly has that consequence. Professor Donald Boudreaux, writing on his Café Hayek blog, nails the truth: “(T)he argument against the minimum wage doesn’t strictly predict that such legislation causes a measurable rise in the rate of unemployment. Rather, the case is that the higher the minimum wage, the worse are low-skilled workers’ job opportunities. These worse opportunities likely (but not necessarily) include fewer jobs for such workers, but they also include the deterioration on other fronts of low-skilled workers’ job fortunes.”
One could call the minimum wage a “cruel hoax” perpetrated on America’s lowest-skilled workers.
