Reply To: The Minimum Wage


I’d say there’s some truth to that. It’s likely that the whole point of the minimum wage is to raise the wage of some (those in unions who aren’t unemployed by it) at the expense of others (those unemployed by it). Hopefully, someone else can explain how it eventually effects people even far higher up in wage. However, there is an effect that many don’t account for, which is that small businesses will be able to compete more easily without a minimum wage. Like any regulation, it makes it much more difficult for them to start up, and allows big businesses to lower wages because there is less competition for their laborers.

If you want a make a moral argument (a lot of moral arguments are inextricably tied up with economics anyway), you could imagine a situation where there is no minimum wage as your starting point. Is it okay to unemploy some people just to increase some other people’s wages? Is it okay if I lobby Congress to outlaw your friend’s employment because my friend happens to be competing with him, and will have a higher wage if he is unemployed?

I don’t know what he means by ‘benchmark.’ If he means there has to be a floor keeping up wages above the “living” wage, then I get that point (I’ll reply to that further below). If he means that employers can’t figure out what wage their worker should get without a ‘benchmark’, then I think that is a strange case to make, and the onus should be on him to explain that further.

If he really is making the “living’ wage argument, I’ve always thought this was ludicrious. What is a living wage? Ask him for a precise definition, what is the exact amount of that wage, and how does he know what it is? Many people cite a “living” wage as their reason for supporting a minimum wage, but few rarely define it. Last time I checked, you could go to Publix (or whatever grocery store), and get bread and peanut butter for under 5 dollars. With a little more money you could probably buy a blanket and perhaps construct yourself some shelter in the woods to sleep in. Sounds like a terrible life, and not one I want to live, but you’re certainly living, aren’t you?

Other than that, it sounds somewhat like your friend just ignores some of your points. Does he really believe there is no unemployment caused by the minimum wage? If so, go through the logic with him. If a minimum wage is above what an employer believes an employee can produce, he will fire that employee because he cannot get profits by keeping him employed. If your friend agrees with this logic, ask him why he believes not a single person produces less than the minimum wage (current or at whatever level your friend thinks they should be at).