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Minimum Sense, Maximum Superstition

Here’s a letter to the New York Times:

Cherry-picking evidence on the employment effects of minimum-wage legislation – evidence that is suspect because it generally fails to consider long-term as well as a sufficiently full range of consequences – Paul Krugman writes that “[r]aising the minimum wage makes jobs better; it doesn’t seem to make them scarcer” (“Power and Paychecks,” April 3).

Well, now.  Just yesterday KING 5 News in Seattle reported that, in light of that city’s recent hike in the minimum wage, not only are some restaurants there “considering hiring fewer servers and using tablets for customers to place orders at tables,” but also that some minimum-wage employees will lose up to three weeks annually of vacation time.

It’s understandable that college sophomores, politicians, ‘community activists,’ and other economically untutored people fall for the superstition that employers’ one and only reaction to being forcibly required to pay low-skilled workers higher wages is to pay the higher wages without attempting in other ways to minimize the cost-increasing consequences of such a requirement.  It’s a shame, however, that a Nobel laureate economist spills ink in one of America’s premier newspapers feeding this absurd superstition.

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

I thank Todd Myers for sending to me the link to the Seattle news report.


A few Cafe patrons have e-mailed me to gently complain that I spend too much time criticizing minimum-wage legislation.  Maybe, but because this issue goes to the very core of economic understanding – and because a lot of high-school and college students read this blog – I believe that my attention to this issue isn’t excessive.

Do realize that minimum-wage legislation is one that miracle-believing superstitionists on the political left are forever bringing up – and one that legislatures are forever considering.  It is incumbent upon sound economists to tirelessly expose the many flaws in the reasoning of those who so simplistically support minimum-wage legislation – not only to ensure that sound economics isn’t hijacked by superstitionists but, more importantly, to help save the least-advantaged workers amongst us from being deprived by these superstitionists of economic opportunities.