Reply To: Minimum Wage, again


If the minimum wage is raised to $15, then it would be a criminal offense for an employer to pay less than $15 to any of his workers regardless of when they were hired. So, there is no benefit to low-skilled workers who cannot generate at least $15 an hour in DMRP. Low-skilled workers who remained employed must be able to generate at least $15 an hour in DMRP. Otherwise the law makes it a crime to employ them. So, an effective minimum wage destroys all legal jobs for workers with DMRP below the minimum wage and entrepreneurs will abandon businesses that rely on labor that produces DMRP below the minimum wage. Unless they can adapt by restructuring in such a way that their lowest skilled workers produce at least $15 in DMRP, restaurants will go out of business. The lowest paid jobs, which pay $15 under the minimum wage, can only be filled by workers who generate at least $15 in DMRP. Free labor market provide the opportunity for entrepreneurs to configure their businesses in such a way as to employ lower-skilled workers at wages commensurate with their DRMPs.