Here’s the best thing I’ve read about the minimum wage in a long time, from Don Boudreaux at Cafe Hayek.
Don has been working this lump of clay to articulate his case against the minimum wage for a long-time and I think it’s finally taken shape into something that is compelling. I especially like:
Flaws galore infect Steven Pearlstein’s case for raising the minimum wage (“Big strides could come from a small bump in pay,” Jan. 5) – that is, his case for government intervention to strip low-skilled workers of the most valuable of the few bargaining chips they have when competing for employment, namely, their ability to offer to work for hourly pay below that of other, more qualified workers who are paid the government-stipulated minimum.
I also like his explanation for why the minimum wage studies that folks like Pearlstein use to support their opinions are flawed.
It would be like empirically studying today the effects of a recent rise in the minimum-allowed price of strawberries if strawberries had long ago been made unnecessarily pricey by minimum-strawberry-price legislation. Consumers would long ago have switched their diets away from strawberries; chefs would long ago have begun concocting fewer desserts and recipes with strawberries and more with other fruits and berries. Other ingredients would have become staple substitutes for strawberries in consumers’ diets and in chefs’ dishes and recipes. Farmers, in turn, would have – despite the formal, legislated higher list price for strawberries – either totally abandoned or significantly abandoned strawberry production.
Read the whole thing.