Minimum Wages = Maximum Barriers

Dave Killion — July 13, 2011

Over at the Vibrant Victoria forum, a discussion on tipping and the service industry has turned to the minimum wage. Commentator “nparker” for the defense –

“Are you saying that without minimum wage labour laws (and a host of other well-fought-for labour regulations) no employer would ever exploit their workers with slave-labour wages? Now THAT defies human nature. Are you familiar with the firm of Marley & Scrooge?”

Well, yes, I am. Marley & Scrooge is a fictional entity, like Wayne Enterprises or Stark Industries. So, not such an effective example.

But more to the point, how much money is currently being earned by people who would get slave-labour wages in the absence of minimum-wage laws? Answer: The same they will earn if the minimum wage is increased – nothing! If someone is only worth slave-labour wages, they are currently prevented from entering the market by minimum wage laws.

And “exploitation” is something that cuts both ways. True, the employer exploits competition between workers in order to minimize wages and benefits. But employers must compete with each other for workers who provide value, and workers exploit that competition in order to maximize the wages and benefits they receive. Left free of government interference, people will enter the market at whatever wage they can command, and in time they can work their way up the ladder. The only thing minimum wage laws do is keep some people out of the market for good. Who’s in support of that?

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David C says

The minimum wage argument pisses me off more than any other because those who advocate for min wages ALWAYS seem to miss the fact that they hurt the poor more than anyone else. It is exhausting having to explain this to every progressive I come across but its worth it because the TRUTH MUST BE PREACHED ON EVERY STREET CORNER.

— July 14, 2011

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