A dear friend, who wishes to remain anonymous, asks me by e-mail:
Why do you spend so much time protesting the minimum wage? Its measurable effects really aren’t that notable.
My friend – a highly respected American economist – believes that (1) the minimum-wage does indeed cause either higher unemployment or worse job conditions among unskilled workers (or some combination of these two ill consequences); (2) the workers harmed most are black and Hispanic teenagers; but (3) any effects are small because the minimum-wage isn’t really all that high.
I’m not sure that #(3) is correct when reckoned over long spans of time, but let me grant its validity here.
I protest the legislated minimum-wage because I have a visceral hostility to shabby economics.
Encountering arguments premised on the (typically unconscious) notion that most employers routinely sit on figurative piles of excess profits or returns that can be tapped into by government diktat (“Raise your workers’ wages!”) without any compensating adjustments or reactions by employers makes my head ache. Encountering otherwise respectable economists performing rococo theorizing in their attempts to explain why unskilled human labor is somehow exempt from the simple application of the law of demand makes my head ache.
Encountering otherwise respectable economists who lend credence, usually unawares, to the person-in-the-street creationist superstition – a creationist superstition held by non-economists on the ideological spectrum ranging from the likes of Harold Meyerson to Bill O’Reilly – that prices, wages, employment conditions, and other economic phenomena are determined arbitrarily, and more or less consciously, by someone in power rather than by decentralized and largely spontaneous market, competitive forces makes my head ache. Letting stand unchallenged this Meyerson-O’Reilly sense that, therefore, the only question is which powerful group of people will determine prices and wages – the government or the oligarchs? – makes my head ache.
Encountering claims that human welfare can be increased so easily and so surely by mere diktat makes my head ache.
Challenging such claims is the equivalent, for me, of swallowing two aspirin tablets.
….
See, re the above, Tim Worstall’s recent essay on the minimum-wage in Forbes.
