Quotation of the Day…

by Don Boudreaux on August 5, 2014

in Seen and Unseen, Work

… is from page 91 of the 18th (2013) edition of Roger LeRoy Miller’s, Daniel Benjamin’s, and Douglass North’s invaluable volume, The Economics of Public Issues (link added):

Indeed, the minimum wage has an aspect that its supporters are not inclined to discuss: It can make employers more likely to discriminate on the basis of gender or race.  When wages are set by market forces, employers who would discriminate would face a reduced, and thus more expensive, pool of workers.  But when the government mandates an above-market wage, the result is a surplus of low-skilled workers.  It thus becomes easier and cheaper to discriminate.  As former U.S. Treasury secretary Lawrence Summers noted, the minimum wage “removes the economic penalty to the employer.  He can choose the one who’s white with blond hair.”

Again, consult Milton Friedman.

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