I’m not altogether happy with the formatting of this post — please note I have a picture on the left and text to its right. Believe me, that took a half hour of messing about to look even half decent, and I know HTML. Probably not going to pursue it further, and yes, the paragraph breaks are not where they should be in the accompanying text. Believe it or not, that’s something I can’t readily control. That’s what I wasted time on. It’s good enough; so be it. Here are my arguments.
The minimum wage is a bad thing; being against it is therefore a good thing.
Why is the minimum wage a bad thing? Well it’s not bad if your objective is to harm the poor and render them unemployed. But most of us that aren’t sadistic or evil, don’t like harming the poor.
The minimum wage has an objective: give the working poor more money so they are less poor. I think it’s a very nice objective. I like it. I don’t know if it’s as good an objective as sex, looking at boobies [worksafe, and ooo, I better post a picture, below], or drinking nice scotch, but it’s a pretty good objective. It’s up there.
And now, a gratuitous picture.
 Bet you thought it was going to be a picture of boobies, right? You lose. Photo Credit: Macallan website. |
Back to the minimum wage. There’s one tiny catch of course. Where does the money we’re trying to get to the working poor come from?Well, answer the proponents of (inevitably) higher minimum wages, it comes from you and me via the businesses (and governments) that now pay their lowest-earning employees slightly more.This sounds to me kind of like a sneaky tax. And of course it is. Employers aren’t stupid. Well, actually quite a lot of them are, but they’re taken care of by a process called “bankruptcy”.Unless they’re a government.Washing dishes may be worth (say) $7.00 an hour to the owners of a small restaurant, but if the cost becomes $8, the owners will buy a dishwasher. The least competent dishwashers will be fired, and the most competent one will be retained to load and unload the dishwasher. |
This isn’t simply a fancy argument: it’s been proven empirically by examining the correlation, while controlling for other variables (fancy words, I know), between minimum wage levels and unemployment rates amongst the poor, the untrained and the stupid (all of whom a high minimum wage hurts).
There are other groups of course that the minimum wage hurts as well, as I suggested above: the stupid and the untrained (typically students or young people).
True, you can tweak the minimum wage so that it doesn’t apply to (say) those under 18 — or even 27, in the case of certain labour laws in some enlightened European countries, but that still doesn’t help the poor or the stupid.
Ultimately, if your objective really is to help the employed poor, you’re best off setting a very low minimum wage of, say $1 or $2/hr, and utilizing some form of refundable (and even advanced) Earned Income Tax Credit.
You might also want to gut Social Security ‘head’ taxes as these are the most regressive and, arguably, racist taxes going.
This of course is also redistributive, and debatably socialist, but interferes far less and is economically rational and defensible.
And that, I suppose, is yet another reason why I’m no longer a libertarian — I just don’t object to some forms of income redistribution that much.
I’d rather my tax dollars go to educating poor legal immigrants’ kids than employing their (older) children to shoot illegal immigrants.
But that’s just me.
-wolfe