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Minimum Sense, Maximum Superstition
From Don Boudreaux of Cafe Hayek.
"Here’s a letter to the New York Times:
Cherry-picking evidence on the employment effects of
minimum-wage legislation - evidence that is suspect because it generally
fails to consider long-term as well as a sufficiently full range of
consequences - Paul Krugman writes that “[r]aising the minimum wage
makes jobs better; it doesn’t seem to make them scarcer” (“Power and Paychecks,” April 3).
Well, now. Just yesterday KING 5 News in Seattle reported
that, in light of that city’s recent hike in the minimum wage, not only
are some restaurants there “considering hiring fewer servers and using
tablets for customers to place orders at tables,” but also that some
minimum-wage employees will lose up to three weeks annually of vacation
time.
It’s understandable that college sophomores, politicians, ‘community
activists,’ and other economically untutored people fall for the
superstition that employers’ one and only reaction to being forcibly
required to pay low-skilled workers higher wages is to pay the higher
wages without attempting in other ways to minimize the cost-increasing
consequences of such a requirement. It’s a shame, however, that a Nobel
laureate economist spills ink in one of America’s premier newspapers
feeding this absurd superstition.
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
I thank Todd Myers for sending to me the link to the Seattle news report.
….
A few Cafe patrons have e-mailed me to gently complain that I spend
too much time criticizing minimum-wage legislation. Maybe, but because
this issue goes to the very core of economic understanding – and because
a lot of high-school and college students read this blog – I believe
that my attention to this issue isn’t excessive.
Do realize that minimum-wage legislation is one that
miracle-believing superstitionists on the political left are forever
bringing up – and one that legislatures are forever considering. It is
incumbent upon sound economists to tirelessly expose the many flaws in
the reasoning of those who so simplistically support minimum-wage
legislation – not only to ensure that sound economics isn’t hijacked by
superstitionists but, more importantly, to help save the
least-advantaged workers amongst us from being deprived by these
superstitionists of economic opportunities."
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