
All demand curves are falling, and the demand for hiring labour is no exception. Hence, laws that prohibit employment at any wage that is relevant to the market (a minimum wage of 10 cents an hour would have little or no impact) must result in outlawing employment and hence causing unemployment…
Since the demand curve for any sort of labour (as for any factor of production) is set by the perceived marginal productivity of that labour, this means that the people who will be disemployed and devastated by this prohibition will be precisely the "marginal" (lowest wage) workers, e.g. blacks and teenagers, the very workers whom the advocates of the minimum wage are claiming to foster and protect.
The advocates of the minimum wage and its periodic boosting reply that all this is scare talk and that minimum wage rates do not and never have caused any unemployment.
The proper riposte is to raise them one better; all right, if the minimum wage is such a wonderful anti-poverty measure, and can have no unemployment-raising effects, why are you such pikers?
Why you are helping the working poor by such piddling amounts? Why stop at $4.55 an hour? Why not $10 an hour? $100? $1,000?…
It is conventional among economists to be polite, to assume that economic fallacy is solely the result of intellectual error.
But there are times when decorousness is seriously misleading, or, as Oscar Wilde once wrote, "when speaking one’s mind becomes more than a duty; it becomes a positive pleasure."
Recent Comments