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This young correspondent is bulldoggish in defending minimum wages.
Mr. A___:
I’m curious why you’re so attached to the case for the minimum wage.
I can understand why labor unions support the minimum wage. (By making the competition artificially costly, it boosts demand for higher-paid unionized workers.) I can understand why well-meaning but economically uninformed people support it. (Failing to understand the causes and consequences of prices and wages, minimum wages strike them as sensible.) I can understand why politicians support the minimum wage. (As H.L. Mencken noted, they’d support cannibalism if they believed that doing so would improve their electoral prospects.)
But I cannot understand why any well-meaning person well-trained in economics supports such legislation.
Pardon me for being blunt: Whenever I encounter a well-meaning economist claim that government-enforced minimum wages are an effective means of improving the economic lot of low-paid workers, my reaction is the same as it would be were I to encounter a well-meaning physician claim that an effective means of weight-loss for overweight people is to cut off their legs just beneath the knees. Problem solved: each overweight person now weighs less than before!
And just as my assessment of this physician would not improve if he explains that, in theory, it’s possible that all overweight people have gangrenous lower limbs requiring amputation, my assessment of pro-minimum-wage economists does not improve when they explain that it’s possible that all or most employers of low-wage workers have monopsony power.
Such rejection of reality isn’t scientific; it’s motivated reasoning in service to ideological dogmatism.
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