According to an article on the website Common Dreams, leftists are lamenting the fact that the federal minimum wage has not been raised since 2009. They are saying that the current $7.25 federal minimum wage is an “abomination.” They want it raised to at least $15 an hour and, preferably, higher.
It is amazing to me that this subject even still has to be debated. What is it that causes such a big mental block among leftists to sound economic reasoning?
If all that governments have to do to raise people’s standard of living is raise the government-mandated minimum wage, then why are North Korea, Cuba, and Venezuela still so poor? After all, according to leftists, all they have to do to raise their people out of poverty is raise the minimum wage. Why haven’t the dictators of those countries figured that out? Maybe leftists haven’t gotten the word to them.
And here is another question for leftists: Why do they settle for $15 an hour or even $20 an hour? Why not raise the minimum wage to $100 an hour? Or even $1,000 an hour? Are they afraid of turning poor people into millionaires?
One more question for leftists: Why do many employers pay more than the government-mandated minimum wage of $7.25?
I’ve got a better idea than raising the minimum wage. I say: Let’s abolish it instead.
When employers are deciding whether to hire someone, they subjectively place a value on a person’s labor. That subjective value is what determines how much they are willing to pay to hire that person.
What happens if an employer subjectively places a value of, say, $5 per hour on a prospective employee? That means the employee will not get hired. That’s because the law requires the employer to pay no less than $7.25 per hour.
That’s why there has been a chronic unemployment rate among black teenagers for decades. Since they lack work experience and workplace skills, employers subjectively place a lower value on their work.
Why would a black teenager be willing to work at $5 an hour? To get his foot into the door, where he could learn workplace skills and a work ethic and get good at a particular job. Then, as he becomes more proficient, his value as a worker increases.
By being denied the ability to reach the first few rungs of the economic ladder, a black teenager is locked out of the labor market during his early formative years. All too many of them, unfortunately, turn toward the drug trade to make quick, big money, thanks to another federal program known as the war on drugs. A large percentage of them end up in federal or state penitentiaries for drug-war related crimes.
By abolishing the minimum wage, everyone would be free to work at the wage he or she desires, even by accepting jobs as free apprentices. In that way, workers would be free to pursue their preferred line of work, get good at it, and then seek higher wages or even open up their own businesses. A free market in wage rates is one of the best ways to raise people’s standard of living and ensure their economic liberty as well.
Reprinted with permission from The Future of Freedom Foundation.
