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Quotation of the Day…

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… is from pages 6-7 of David Neumark’s and William L. Wascher’s 2008 book, Minimum Wages [2]:

Based on the extensive research we have done, and our reading of the research done by others, we arrive at the following four main conclusions regarding the outcomes that are central to policy debate about minimum wages.  First, minimum wages reduce employment opportunities for  less-skilled workers, especially those who are most directly affected by the minimum wage.  Second, although minimum wages compress the wage distribution, because of employment and hours declines among those whose wages are most affected by minimum wage increases, a higher minimum wage tends to reduce rather than to increase the earnings of the lowest-skilled individuals.  Third, minimum wages do not, on net, reduce poverty or otherwise help low-income families, but primarily redistribute income among low-income families and may increase poverty.  Fourth, minimum wages appear to have adverse longer-run effects on wages and earnings, in part because they hinder the acquisition of human capital.

Yep.  Just as McDonald’s ability to find willing buyers for its burgers would be hampered rather than enhanced if government sets a minimum burger price – a regulation preventing any burger joint from offering to sell its burgers at prices lower than prices charged by gourmet burger restaurants – so, too, the lowest-skilled workers’ ability to find willing buyers for their labor services is hampered rather than enhanced when government prevents the lowest-skilled workers from offering to sell their labor services at wages lower than wages charged by higher-skilled workers.  (An amazing fact is that many proponents of the policy of stripping low-skilled workers of one of their most effective bargaining chips fancy such a policy to be humane.)

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