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Reckless With Other People’s Livelihoods

It’s disturbing how recklessly some people ‘reason’ when what’s at stake are the livelihoods only of other people.  Here’s a letter to the Wall Street Journal:

William Pease rightly wants economists to consider the “broad, long-term impacts” of raising the minimum wage, but he wrongly understands those impacts (Letters, Dec. 28).  For example, after acknowledging that some workers will be made unemployable by the minimum wage, he asserts that all low-skilled workers who manage to remain employed following a 10% minimum-wage hike will get a 10% raise.  Unlikely.  Because employers are ever-attentive to their bottom lines, not only will many of these still-employed workers find their hours reduced, they will also suffer more burdensome job demands as well as cuts in their fringe benefits.

Mr. Pease also ignores another broad, long-term impact of the minimum wage – one that economists have long noted – namely, the unemployment unleashed by the minimum wage is not random.  Inner-city single moms without their own cars, or Hispanic immigrants who speak only broken English, are more likely to be priced out of work by the minimum wage than are suburban teens with their own cars and with plans to attend college after they graduate from their highly-ranked suburban high schools.  The resulting broad, long-term impact, therefore, of the minimum wage is to further enhance the incomes and opportunities enjoyed by those who need them least by denying incomes and opportunity to those who need them most.

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