Much of the argument for increasing the minimum wage or establishing a “living wage” involves an implication that greedy business people refuse to pay workers what their labor is really worth. In the name of higher profits, these business owners shortchange their employees.
The John Locke Foundation has repeatedly attacked bogus arguments touting a minimum wage. In addition, Ludwig von Mises blaced the “blame” for “low” wages squarely where the blame belongs. Here’s the relevant passage from Human Action:
Wage rates are
ultimately determined by the value which the wage earner’s fellow
citizens attach to his services and achievements. Labor is appraised
like a commodity, not because the entrepreneurs and capitalists are
hardhearted and callous, but because they are unconditionally subject
to the supremacy of the consumers of which today the earners of wages
and salaries form the immense majority. The consumers are not prepared
to satisfy anybody’s pretensions, presumptions, and self-conceit. They
want to be served in the cheapest way.
