This 12-minute-plus clip from Milton Friedman’s 1980 Free to Choose series is on the minimum wage; it features, in addition to Friedman and other guests, my GMU Econ colleague Walter Williams. (HT Mark Perry)
I wonder if the labor-union lobbyists – mentioned at the start of the clip by Friedman as having prominently testified before Congress for a hike in the minimum wage – were motivated to press for a higher minimum wage because they genuinely believed that employers of low-skilled workers have monopsony power.
Actually, in fact, I wonder no such thing – and neither do you. No one seriously entertains the possibility that labor-union lobbyists were then, or are now, moved to support hikes in the minimum wage because labor-union officials have concluded that monopsony power in the market for low-skilled workers is a real problem.
Obviously, the fact that lobbyists who press for government action M do so for reasons different from those that scholars offer to justify policy M does not prove that those scholars’ justifications, and the theory upon which those justifications are based, are flawed. But this fact is evidence that those who support M - including academic types – should, when judging the merits of M, exercise far more skepticism (and display greater understanding of political reality) than they normally do when issuing their theoretical justifications for policy M.