William Poole, over at Cato@Liberty, writes eloquently about minimum-wage legislation, and about the disquieting fact that dozens of prominent economists signed a petition in favor of this legislation that necessarily raises employers costs of employing low-skilled workers. (Poole here quite sensibly ignores the practically irrelevant theoretical curiosity of monopsony power in the market for low-skilled workers.) A slice:
Who are the workers not hired? They are the least skilled, most disadvantaged members of society. The bottom line is that those who advocate an increase in the minimum wage are willing to trade the higher wages of those who remain employed for reduced employment opportunities for the least skilled….
I wish it were possible for today’s long-term unemployed to plead with the economists and editorial writers not to advocate a higher minimum wage. Will those advocating a higher minimum wage be willing meet face to face with disadvantaged members of society, who are willing and able to work, and explain why their employment needs to be sacrificed for higher wages for those who remain employed?
Poole and Samuelson hit some key nails square on their heads. My son, Thomas, will turn 17 in June and look for a summer job. I have no doubt that he’ll find one, even if the minimum wage is raised. He’s a white, healthy kid with a private-school education from wealthy suburbia. Although his parents each earn far more income than is necessary to keep him well-fed, well-clothed, well-housed, well-educated, and properly amused, Thomas is just the sort of young low-skilled worker who benefits from a higher minimum wage: his pay will rise if the minimum wage is increased. But it’s an unjust benefit, one that Thomas and other similarly situated young men and women – and their relatively wealthy families – enjoy at the expense of faceless other, much less-wealthy men and women who aren’t from America’s prosperous, proper, and well-schooled suburbs. These faceless others lose their jobs or become unable to find jobs or discover that the terms and conditions of any jobs that they can find are more onerous than otherwise. As I’ve argued earlier at the Cafe, were I looking out only for my and my family’s well-being, I’d support calls for a higher minimum wage.
Some surveys of economists find that a majority of us do understand that the law of demand operates just as unimpeded in the market for low-skilled workers as it operates in the market for other goods. (This survey of economists by the Wall Street Journal finds that 54 percent believe that a higher minimum wage will reduce the employment prospects of low-skilled workers. Fifty-four percent, alas, does remain an embarrassingly small number. Still, at least it’s a majority.)