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Neither Alternative Is Attractive

Here’s a letter to a bank president:

Mr. Keith Mestrich, President
Amalgamated Bank

Mr. Mestrich:

In an e-mail sent to me today by a publicist bragging about your support for the “Fight for $15” movement to more than double the national minimum wage, you are quoted as thanking “Fight for $15 and the tens of thousands of workers mobilizing today for their tireless leadership on this critical issue.  Amalgamated Bank will be with you every step of the way.”

Tell me, Mr. Mestrich, will your bank extend loans to businesses that continue to employ workers whose wages have been doubled even if such employment practices render those businesses unprofitable?  And will your bank also refuse to put on its balance sheet profitable loans made to businesses that protect their bottom lines by substituting lower-cost machines for human labor that is made artificially costly by a hike in the minimum wage?

If your honest answer to these questions is ‘no,’ then your talk is cheap.  You in fact will not be with the victims of a higher minimum wage “every step of the way.”  If, instead, your honest answer to these questions is ‘yes,’ then while I might applaud your integrity in putting your shareholders’ money where your mouth is, I would also have more than sufficient reason to question your competence as a banker.

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