If Government Can Work Miracles….

by Don Boudreaux on March 19, 2016

in Reality Is Not Optional, Seen and Unseen, Work

Earlier today at a Fraser Institute student seminar in Montreal, Ben Eisen delivered a superb talk on the minimum wage as a poverty-fighting tool.  He explained – using sound economic theory and admirable coverage of empirical findings – that the minimum wage is as effective a tool for fighting poverty as is gasoline as a tool for fighting fires.

One of the stats that Ben cited is that only three percent of workers who work full-time year ’round live below the poverty line, while sixteen percent of workers who work only part-time live below the poverty line.  (I can’t recall if Ben’s stats are for Canada or the U.S., but because the general trend no doubt holds in nearly all countries, whether Ben’s specific stats are for Canada or the U.S. doesn’t matter for purposes of my post here.)

Here’s a mental experiment (one that I might have offered, in some form, in the past): suppose that Pres. Hillary Clinton or Pres. Bernie Sanders – displaying to the public her or his courageous opposition to poverty – cites the stat that Ben mentioned and then proposes that government outlaw part-time work.  “Because every worker should be able to live decently upon his or her earnings,” proclaims the president, “and because working full-time enables a worker to earn more income than that worker earns when working only part-time, it shall hereby be the law of the land that every worker must be employed full-time.”

I’m pretty sure even the most ardent supporter of the minimum wage would balk at such a proposal.  But why?  What’s the difference between minimum-hour legislation and minimum-wage legislation?  If government dictates that each worker shall be paid no less than $X per hour, and if this diktat has no effect on workers other than ensuring that no worker is paid less than $X per hour, what reason is there to suppose that if government dictates that all jobs shall be full-time jobs that this diktat have any effect on workers other than ensuring that all workers will now be employed full-time – and, hence, that the number of people living in poverty will fall?

Put differently, if government can work miracles when it dictates hourly wages, why can’t it work miracles when it dictates hours of work?


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