Mr. Bob Keener
Businesses for a Fair Minimum Wage
Dear Mr. Keener:
Thanks for your latest mass e-mail in support of outlawing the profitable employment of all workers whose skills are so poor that they cannot produce hourly value at least equal to the legislated minimum wage.
Does your group also support legislation to outlaw labor-saving technology such as self-service cash registers at supermarkets, self-service meal-ordering devices at fast-food restaurants, robotic vacuum cleaners, and robots that load and unload warehouse shelves? If not, you should. The reason is that, without such a prohibition, a higher minimum wage will prompt many businesses to substitute machinery for labor – an effect that will harm many of the workers you seek to help.
Also, does your group support legislation to prevent consumers from changing their spending patterns – for example, legislation to prohibit consumers from eating more meals at home (as the prices of restaurant meals rise), from doing more of their own house-cleaning (as the price of maid service rises), and from changing the oil in their cars (as the price of simple automobile maintenance rises)? If not, you should. The reason is that a higher minimum wage - especially if labor-saving technology is outlawed – will cause businesses’ costs of supplying goods and services to rise. The prices of these goods and services will, of course, also rise. But if consumers, free to spend their money as they please, respond to these higher prices by cutting back their purchases, businesses will cut their production and thereby destroy the jobs of many of the workers you seek to help.
So in addition to a higher minimum wage, you’ll want prohibitions on labor-saving technology along with legislation that freezes consumer spending patterns.
Seeing the necessity of expanding your group’s legislative agenda beyond raising the minimum wage, you can then rename your group “Businesses for a Fair Minimum Wage, Against Labor-Saving Technology, and Against People’s Freedom to Spend their Money as they Choose.”
Your group’s name will then better reflect the insight and humanity of your economics.
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
P.S. An Update from the comments section of this blog – specifically, from a comment by Harold Saxon:
Furthermore, why did he [Mr. Keener] send this by mass e-mail? Surely he would have created more jobs by sending it via bulk mail: tree cutters, paper makers, stamp makers, postal workers, etc etc. Think of all the people who go into making a letter, which he has thus shunned by email!