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Quotation of the Day…

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is from a January 4, 1979, newspaper op-ed by U.C.L.A. labor economist Finis Welch [2]:

A mandated minimum wage is a kind of lottery in which a worker must find employment at or above the specified level.  There is no constraint on the number of jobs, but employers who would otherwise pay some workers lower wages must pay the minimum or not hire them.  The result is that winners receive increased wages and losers lose their jobs.  Paradoxically, the losers are those who would have earned the least in any case.

What degree of confidence in the speculation that employers of low-skilled workers have monopsony power is sufficient to excuse academic proponents of minimum-wage legislation for their complicity in a policy that, if these academics are mistaken in their hypothesis about the state of the labor market, makes it illegal for the lowest-skilled workers to work?  Is the existence of such monopsony power so obvious and incontestable as to justify academic scribblers throwing their support behind a policy that, if these scribblers’ hypothesis about labor-market conditions is mistaken, condemns tens of thousands of innocent low-skilled workers to the ranks of the structurally unemployed?

To experiment so blithely with the livelihoods of the least-productive workers based on nothing more than speculation that monopsony power exists in the market for low-skilled workers is a morally dubious enterprise.