By Tom Quiner

the minimum wage hurts the poor

A perusal of Facebook today revealed the little nugget above.

The underlying premise of the minimum wage is that greedy business owners will underpay low skill workers; and  that the government needs to intercede and coerce small (and even large) businesses to pay them a “just” wage.

Even the U.S. Council of Catholic Bishops supports the idea of a minimum wage.

Quiner’s Diner supports the foundational principle at work, that of fair wages and the lifting of people out of poverty.

Is the minimum (coerced) wage the best way to do it? Honorable people can disagree. But an embrace of free markets is not an indication of heartlessness, just as an embrace of overzealous government intervention is not a sign of compassion.

Let us assume the minimum wage was $23 as advocated by the poster above. What would happen?

Folks in need of a job would not be able to find a job. Their skills just may not be worth that much to most employers. An employer might say to him, “this job is worth $7 an hour to me, that’s all I can afford. Take it or leave it.”

The government would not allow that option, though, if the minimum wage was $23 per hour.

If the worker wanted to accept the $7 per hour wage, it would be illegal for the employer to do so. The minimum wage strips workers of the right and dignity to sell their labor for what it is worth.

They are left with limited options, such as filing for unemployment, working on the black market at a wage closer to what they’re worth, or improving their skill-set.

That last option is what naturally occurs when low-skill workers get an entry level job. Such a job helps them learn skills such as following directions, getting to work on time, being responsible, and learning how to get along with people.

As they demonstrate each of these skills and learn more about the job, their value rises. When that happens, the boss has incentive to pay employees more or risk losing them to another company.

This is the law of supply and demand in action.

What the minimum wage does is make the entry point into the labor market more difficult. Young workers, in particular, are hurt because their value is less than more experienced workers with demonstrated skills.

So if the minimum wage was truly $23 per hour, it would not be a just wage on four fronts:

1. Young and inexperienced workers would not truly be worth that much, so the government is demanding that employers subsidize their lack of experience, an unjust proposition.

2. Young and inexperienced workers are denied the right to sell their labor for what it is truly worth.

3. Young and inexperienced workers would be priced out of entry level jobs by a government that has over-valued their worth.

4. Perhaps the most unjust outcome is the lack of self-worth people feel when they are unable to find work, because of an artificial barrier imposed by government.

Are these folks really better off unemployed because of the minimum wage than they would be with a job earning what their skills merit?

No Comments

  1. juwannadoright on June 7, 2012 at 6:58 pm

    This post might alternatively have been entitled, “The Greek Economic Solution.”

    In Las Vegas, slot machines spewing nickels, dimes and quarters have been replaced with machines that provide a cashable ticket. And another machine does the cashing – eliminating the need for some change people and for others working in the cashier’s cage. Technology is, in large measure, something which we feel we cannot live without – but it is because of it that many can now not earn a living.
    People with the poorest skill sets will always be the first to be replaced.

    I wonder if the cartoonist realizes that when he or she completes a customer service issue using a computer system that that job used to be held by a person – whatever their rate of pay may have been.

    • quinersdiner on June 7, 2012 at 9:38 pm

      Good insights. Thanks for sharing. Always good to hear from you.

  2. skyedog27 on June 7, 2012 at 11:24 pm

    I would happily pay $23 bucks an hour just to avoid the angst I feel every time I hear a smarmy recorded voice instructing me to “please listen the following menu options”….

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