From: David Lucifer (david@lucifer.com)
Date: Sat Oct 25 2003 - 14:28:50 MDT
[Blunderov] I am interested in your surprising, to me, assertion that the minimum
wage is not a good idea. Would you mind elaborating? (I must confess I
don't at all know what the original purpose of the legislation was.)
Am I mistaken in assuming that it was to guarantee a minimum standard of
living for those fortunate enough to be employed?
[Lucifer] I think that was the intention. Nice idea, but the policy is fatally flawed.
In general, buyers want to minimize the price they pay for goods or services while sellers want to maximize the price they can get for same. This is true in labour markets as well. The price should be agreed upon by both sides of the contract, not a 3rd party such as the gov't.
The minimum wage does not raise the wage of those workers who for whatever reason would sell their labour at less then minimum wage, it just puts them out of work. Employers won't magically come up with the money to pay more than they think a position is worth, they just do without or load the work on to other people. Everyone involved is worse off than they would be if they were allowed to agree on a wage.
Imposing a minimum wage makes about as much sense as making it illegal to volunteer.
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