The Wages of Politics November 11, 2006; Page A6 WALL STREET JOURNAL [abridged by me]
The Bureau of Labor Statistics puts the number of minimum-wage earners at 2% of the work force. The majority of these are under 25 years old and single. Minimum-wage jobs also tend to have higher turnover. The theory propounded by the advocates of a higher minimum wage is this: The market for minimum-wage jobs is neither efficient nor fair. Workers don't have adequate information about the alternatives available to them, and employers don't know enough about what the true market-clearing price is. So employers impose an artificially low wage rate on the disadvantaged, who as a result don't work as hard and tend to quit more often than they would if they were paid "fairly." Raising the minimum wage increases productivity and decreases turnover (because workers are more satisfied), which lowers the real cost of the job as well as the frictional costs of constantly seeking and training new workers (costs the employer was unwittingly paying because he didn't know the "correct" price to pay his workers). Everyone is better off; no one suffers. The problems that afflict this idyll are no different from every attempt to replace market-determined prices with planned ones. Even if it is true that some workers are underpaid, and it probably is, there's still the problem of determining what the right wage is. Why would anyone suppose that Nancy Pelosi knows that better than the supermarket manager? If you are a young black male, you are slightly more likely than the general population to be paid minimum wage, but you are almost 10 times as likely not to have a job at all. And if you're unemployed, raising the minimum wage not only doesn't help you find a job; it probably hurts. Welcome to Speaker Pelosi's idea of progress. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Introducing the Fusion Authority Quarterly Update. 80 pages of hard-hitting, up-to-date ColdFusion information by your peers, delivered to your door four times a year. http://www.fusionauthority.com/quarterly Archive: http://www.houseoffusion.com/groups/CF-Community/message.cfm/messageid:220475 Subscription: http://www.houseoffusion.com/groups/CF-Community/subscribe.cfm Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=89.70.5
