How Raising the Minimum Wage May Be Contributing to Riots

In the book, Freakonomics, there’s a story about the downfall of Romanian dictator Nicolae Ceausescu. The author’s of the book, Dubner and Levitt, suggest that a ban on abortion and restricting contraception — intended to increase the population of Romania — may have led to a more unwanted children who grew up under less than ideal conditions and when they came of age they rebelled and took the dictator down.

I have a similar thought about riots.

Raising the minimum wage is a reliable vote getter of the political left. Advocating the raising of it sounds good enough to get votes in a classic example of what Frederic Bastiat called the Seen and the Unseen.

The seen: It’s easy to see the benefit to those minimum wage workers who keep a job and get a raise.

The unseen: It’s not so easy to see that a higher minimum wage reduces legitimate job opportunities for these very same workers.

It’s not so easy to see that the benefits of an entry-level job isn’t just the wage earned. It’s also the gaining of job experience and learning how to be useful and productive, which makes these workers — often teenagers — more valuable and more likely to earn a higher wage in the future.

It’s also about having opportunities to occupy your time doing something productive rather than whine that ‘there’s nothing for us to do,’ so when you get the text or Facebook message from your friend that says, “let’s riot,” you’re more likely to respond, “Can’t, gotta work,’ instead of, “I’m in!”

Unemployment among teenagers is high, even higher among black teenagers. The opportunity cost of rioting is low.

Smart guys tell us that studies show that the minimum wage have little, no, and sometimes positive effects on unemployment. Many believe them without question. They’re smart, after all. But, we forget, smart people can be dangerous. They have the ability to rationalize anything. To filter the evidence and present to support their forgone conclusions. Like magicians create illusions. And one affliction these smart people have, that magicians don’t, they are prone to believing their own bullshit. Magicians know their tricks are tricks.

These smart folks don’t tell us about the problems with such studies, or the studies that find the opposite, or the plain evidence that’s right in front of their eyes — unemployment is the highest among the very population who make low wages.

That’s the illusion. The smart people turn your attention away from that plain fact. Or, if they acknowledge it, they convince you (and themselves) that it’s better to be unemployed and wait for a job with a higher wage than it is for them to accumulate productive experience — even if the minimum wage does happen to have an ill effect on unemployment.

They also don’t acknowledge that while they’re holding out for such jobs (when they will magically appears, who knows), they are also more likely to show up and riot.


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