March 23, 2019

The Best Argument Against Minimum Wage Laws: You Don’t Own Other People

min wage article picWith Democrats about to take control of the House, it is likely we will see an increase in the federal minimum wage pass the lower chamber, even if it has no chance of becoming a law. We will just as surely hear opponents making completely sound economic arguments against minimum wage laws.

Minimum wage laws cause unemployment, these opponents say, because they price those workers whose skills don’t justify the minimum wage out of the market completely. If a worker only has the skills to produce $14/hour worth of benefits to an employer, the employer is better off not employing that person rather than losing $1 dollar/hour doing so, if the minimum wage is $15/hour. And regardless of where the minimum wage is presently, any increase in the price of labor will result in less demand for labor, all other things being equal.

That’s basic economic reasoning and wasn’t even controversial until recently when, for political reasons, economists like Paul Krugman began contradicting their own earlier writing on the same subject. But as economically sound as the unemployment argument against minimum wages may be, it ignores a previous and much more important one: you don’t own other people.

Read the rest at Foundation for Economic Education…

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

Comments

  1. Frank Lessa says:

    If minimum wage causes unemployment, zoning and housing codes cause overcrowding, displacement, and homelessness.

    The fact that one is considered undesirable bad policy and the other desirable good policy speaks to the national bias toward property owners and the animus toward those without property, which have existed from Day One.

    In a truly free housing and land use market, housing would be affordable to all workers.

    In an unfree housing and land use market, minimum wage becomes an unfortunate cost paid to make housing (somewhat) affordable to workers.

    Homeowners have vested financial and lifestyle interests in keeping people of inferior means from moving into their neighborhood; government serves these interests well.

    It is time to either liberate our housing and land use markets or accept minimum wages as insufficient mitigation of the economic damages caused by our policies.

    The ball is in your court.

  2. Frank Lessa says:

    The best argument against zoning codes:

    You don’t own other people’s property.

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