When people talk about raising the minimum wage, I am always confused about the arguments that they put forth in support of the wage increase. Why? Because none of the arguments are very good and none of the arguments consider counterarguments. Here is a succinct encapsulation of many possible counterarguments to raising the minimum wage, put forth by Don Boudreaux:
“…many non-economists say that they believe that most, or at least very many, low-skilled workers are consistently paid less than the market values that they produce for their employers. Yet not only is this stated belief difficult to square with high rates of bankruptcy of restaurants and other small businesses that employ lots of low-skilled workers, it is also difficult to square with the overwhelming inaction of the people who profess this belief to enter the market to take advantage of this allegedly large pool of consistently underpaid workers.”
Yes, to those of you who say “raise the minimum wage”, an alternative is simple and requires no legislation: start a business that can capitalize on all this untapped and unpaid productivity that you see out there.
That is, rather than forcing beliefs about the world on others (beliefs which are almost certainly incorrect, or at the very best incomplete), simply do yourself what you would have other do. Hey, isn’t that like, uh, the Golden Rule, or some variant thereupon?
…second piece, same as the first, and again, by Don Boudreaux, the master of eloquence and economics (below, “you” is a reference to the Prez):
The premise of your plea is mistaken: raises aren’t given by votes, by you, or by Congress: they’re given only by employers. And employers must fund these higher payments out of the revenues they earn by competing successfully in markets. Employers, therefore, can afford to raise their workers’ pay only if their workers become more productive – an outcome that is not achieved by a legislature waving its wand over workers’ paychecks.
You are, however, correct in one sense. Because the policy you propose would price many workers out of jobs, that policy would indeed change these workers’ incomes: it would drop them to $0. So I say this: If you truly believe you could be unemployed full-time and support a family on $0 a year, go try it. If not, vote to give millions of the hardest-working people in America opportunities to work that they are now denied. Abolish the minimum wage.
Note that this is not, primarily, an economic argument about the minimum wage. (It is about that, but not primarily.) What Don’s writing about is primarily: what is the proper mechanism by which to set wages. He’s arguing that wages are best set not by legislation but by employers. (When you then ask “why?”, then it becomes an economic argument.) If you think this is a triviality (namely, how wages should be set, by employers or by legislation), then let me posit this question: Is legislation the proper way to “determine” the laws of physics? (I use determine in quotes because the answer to the question is no, and as such determining the laws of physics through legislation is impossible.)
Finally, we have the equally eloquent George Will on the welfare state. Here, I shall quote Will’s own quote of Daniel Patrick Moynihan, which appears as the thrilling conclusion of the article (note that I include a link to Moynihan’s wikipedia page so that the curious reader can see what flavor of politics Moynihan practiced. Spoiler: he wasn’t Republican):
“the issue of welfare is not what it costs those who provide it but what it costs those who receive it.”
These three articles are called “easy pieces” by me for a reason.