Tuesday, July 7, 2015

The NYT Unintentionally Presents Evidence Against the Minimum Wage

By Don Boudreaux.
"Here’s a letter to the New York Times:
Reporting on the decline in teenage employment in the U.S. you write that “[e]xperts are struggling to figure out exactly why” (“It’s Summer, but Where Are the Teenage Workers?” July 4).  Hmmm.  Apparently none of the experts interviewed for your report offered the most obvious explanation: minimum-wage legislation.  Being both unskilled and without work experience, teenagers’ productivity is very low – too low in many cases to make them profitable hires for employers who must pay the government-dictated minimum wage.
Your failure even to mention the minimum wage as potentially being among the reasons for the decline in teenage employment is especially mysterious given this paragraph in your report:
What is clear is that those who need a job the most are often the least likely to get one.  To a large extent, the higher a household’s income, the more likely a teenager is to get a job.  Suburbanites have a better shot than city dwellers, and white teenagers face far better odds than blacks, in part because of disappearing federal support for summer jobs.
Economists who analyze the minimum wage in depth have long predicted that the relatively few jobs that are available at the minimum wage will be filled disproportionately by the least-risky among low-skilled workers – such as workers who hail from affluent suburbs with good schools, who are privy to the ‘right’ social connections, and who, having their own automobiles, can get to work more reliably than can workers who must depend upon public transportation or the good graces of busy family and friends.
Although you don’t realize it, the reality unmasked throughout your report supports economists’ traditional warnings of the many wretched consequences unleashed by minimum-wage legislation.
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
Other factors, undoubtedly, also are now working to reduce the labor-force participation of teenagers in America – forces such as the increasing prosperity of ordinary Americans (which permits greater consumption of leisure and other non-income-earning pursuits).  But to write such a report without even mentioning legislation that directly raises the cost of employing low-skilled workers is inexcusable."

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