Minimum Understanding

by Don Boudreaux on February 13, 2012

in Competition, Myths and Fallacies, Seen and Unseen, Work

Here’s a letter to the Gray Lady:

Noting that “New York is an expensive place to live,” you call upon the legislature there to raise New York’s hourly minimum-wage from $7.25 to $8.50 (“Raise New York’s Minimum Wage,” Feb. 13).

In the same spirit of demanding that government improve people’s economic well-being simply by ordering that people be paid more, allow me to make a similar plea on your behalf.

The newspaper business today is in difficult straits.  So I hereby call upon the legislature in Albany to force you and other newspapers in New York to raise your subscription and advertising rates by 17.2 percent (the same percentage raise that you want to force low-skilled workers to demand from their employers).  Voila!  If your economic theory is correct, your profits will rise.  And the magnitude of these higher profits, we can assume (just as you assume in the case of low-skilled workers), will be greater than any negative consequences that might be unleashed by such legislative interference in your ability to determine the terms on which you sell your services.

You can thank me by giving me my own column, and pay me out of the extra profit that you’ll earn as a result of my petitioning the legislature on your behalf – a petition that, as you say about efforts to raise the minimum-wage, “should not be a controversial measure.”

Sincerely,
Donald J. Boudreaux
Professor of Economics
George Mason University
Fairfax, VA  22030

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