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Here’s a letter to the Washington Post:
Peter Whoriskey writes that “the White House argues that ‘modestly’ raising the pay rate will not stall the jobs recovery. ‘A range of economic studies show that modestly raising the minimum wage increases earnings and reduces poverty without jeopardizing employment,’ according to the White House press office” (“Wal-Mart holds back on minimum wage proposal – so far,” Feb. 21).
Overlooking the fact that there’s also a range (and a sizeable one, at that) of economic studies showing that modestly raising the minimum wage does indeed jeopardize the employment options of low-paid workers, I have a question for anyone who believes that a nearly 25-percent hike in the minimum wage will not harm low-paid workers. Suppose the government were to mandate, not an hourly minimum wage, but, instead, an hourly minimum break time. Specifically, suppose Uncle Sam were to oblige employers to force each worker earning less than $9.00 per hour to take at least 15 minutes of break time each and every hour. Is it plausible that employers would continue to pay their low-wage workers for 45 minutes of work per hour the same wage that these employers paid for 60 minutes of work per hour?
Does anyone seriously doubt that employers would respond to this mandate by reducing these workers’ hourly pay, by replacing many of these workers with machines, by working these employees 33 percent harder or faster, or by otherwise adjusting to the higher costs imposed by a mandated minimum break time in ways that reduce the employment options and benefits available to low-paid workers?
Assuming that everyone of sense sees that a mandated minimum break time would prompt employers of low-skilled workers to adjust in ways detrimental to those workers, why do so many people of sense deny the reality that a mandated minimum wage – which is nearly the same beast as a mandated minimum break time – prompts the very same sort of adjustments by employers?
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
More Links On The Minimum Wage
Dwight Lee, writing in today’s Wall Street Journal,
Evidence from Canada on minimum-wage legislation apparently isn’t friendly to the Card-Krueger conclusion. (HT Tyler Cowen)
John Cochrane tosses in his valuable two-cents.
This unsigned editorial in Hamodia makes some excellent points.
Bob Murphy offers some more numbers.
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