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He’s Rather Cavalier With Other People’s Well-Being

Here’s a letter to the New York Times:

You report that economist Gary Burtless, when asked about the 20 states that today are raising their minimum wages, “contended that new higher wages would ‘more than offset’ the loss of earnings associated with a drop in employment.  The new rules will give workers an extra $1.6 billion next year’” (“States’ Minimum Wages Rise, Helping Millions of Workers,” Jan. 1).

By implicitly treating minimum-wage workers as if they all are part of some giant, family-like collective, Mr. Burtless blithely brushes aside the chief objection to a hike in the minimum wage.  That objection is not the fear that raising the minimum wage will reduce the total amount of pay received by minimum-wage workers as a group.  Instead, the objection is precisely that raising the minimum wage will destroy some low-wage jobs – and destroy especially the jobs of workers who can least afford to be unemployed.

The force of this objection isn’t diminished one iota even if it’s true that a higher minimum wage will give workers as a group an extra $1.6 billion, or for that matter an extra $100.6 billion, next year.  The reason is that only employed workers get higher pay; workers rendered unemployed by the higher minimum wage not only lose their current pay but also the opportunities to gain valuable on-the-job experience.  And no amount extra pay for white teenager Jones from the affluent suburbs in any way “offsets” for black single-mom Smith from the inner city the resulting loss of both pay and work experience.

Donald J. Boudreaux
Professor of Economics and Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030

(HT to Walter Williams for alerting me to this NYT report.)

Note also that Burtless ignores whatever losses a higher minimum wage imposes on business owners and on consumers.