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Bonus Quotation of the Day…

… is from page 267 of the late Ben Rogge’s 1971 essay “The Welfare State against the Negro,” as this essay is reprinted in A Maverick’s Defense of Freedom, the 2010 collection of Rogge’s essays that is edited by Dwight Lee:

Let me read you another one.  “Minimum wage rates: these often hurt those they are designed to help.  What good does it do a Negro youth to know that an employer must pay him $1.60 per hour if the fact that he must be paid that amount is what keeps him from getting a job?”  By the way, we need not just say Negro youth there; what good does it do any young person to know that an employer must pay him $1.60 if that is the fact that keeps him from getting the job at all?  Where is this statement from?  From the seventh edition of Economics by Paul Samuelson.

Paul Samuelson (1915-2009) – the first American to win the Nobel Prize in economics and a scholar embraced warmly by the political left – asked the most appropriate question about minimum wages.  This question, which is asked also by many others, has yet to be answered adequately.  It is usually ignored.  When it is not ignored, this question either is said to rest on a false premise (‘The best research show that the minimum wage casts no one out of a job!”) or is accused of being the wrong question (“The correct question is whether or not the losses suffered by those who, unfortunately, are rendered unemployable are outweighed by the gains enjoyed by those whose incomes rise as a result of the minimum wage.”).  Apart from the theoretically possible – but in the U.S. empirically preposterous – existence of monopsony power in the market for low-skilled workers (or the even more preposterous ‘efficiency-wage’ justification for minimum wages), minimum wages must shrink low-skilled workers’ employment options.  This shrinkage, moreover, almost certainly comes chiefly in the form of destroyed jobs (although it can, and surely does, occasionally come also in the form of worsened work conditions or fewer fringe benefits).

See this related EconLog post by David Henderson.

Proponents of the minimum wage are enemies of the least advantage people in society.  That most minimum-wage proponents do not realize the cruelty that their pet policy unleashes does not alter the reality.