Here’s a letter to a college student (from where, I do not know) who e-mailed me this morning in response to this blog post:
Mr. Jared Jordan
Mr. Jordan:
You dismiss as “wrong on its face” my conclusion that “If you really want to fight poverty, fight to end minimum wages.” You insist that “the minimum wage gives needed income boosts to those who need them most.”
Yet how does pricing the lowest-skilled workers out of jobs boost their incomes? Do you think, for example, that the incomes of landlords who rent small, efficiency apartments would be boosted if government required them to charge minimum rents – rents much closer to those charged for upscale apartments? Do you think that the incomes of people who sell used cars would be boosted if government required them to charge minimum car prices – prices much closer to those paid for new cars? Do you think that the incomes of franchisees who operate economy motels such as Motel 6 and Days Inn would be boosted if government forced them to charge minimum room rates – room rates much closer to those charged by Hilton and Hyatt? Do you think that the incomes of long-distance bus operators would be boosted if government compelled them to charge minimum bus fares – fares much closer to those charged by airlines?
Do you suppose that the incomes of young, unknown, upstart novelists would be boosted if government ordered that they be paid, for their accepted manuscripts, minimum advances and royalties – advances and royalties closer to those paid to the likes of Stephen King and J.K. Rowling?
If you, like me, suspect that these examples of minimum prices and fees would harm the sellers that they would be ostensibly said to help, then you should see that my argument that minimum wages harm rather than help low-skilled workers is not wrong on its face.
Sincerely,
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
