A Failure to Communicate: The Case of the Minimum Wage

by Liberty and Power

Many of us have been trying to teach the public that the laws of economics operate no matter what anyone thinks of them. They grow out of the nature of human action. But the message hasn’t gotten through. Around the country people are enthusiastically voting in referendums to raise their state's minimum wage above the federal $5.15 level. Petition campaigns to put the question on state ballots never fail, says the Ballot Initiative Strategy Center. As NPR's Mara Liasson reported on"Morning Edition" recently,"It's not hard to get people to sign."

What's going on?

. . . Our work is cut out for us advocates of the free market. Since the educational strategy we have pursued until now has failed with large numbers of lay people, I suggest a modified strategy: It is essential that principled opponents of the minimum wage not appear insensitive to the plight of low-income workers. Some people of course are responsible for their economic plight, but many others are put at a disadvantage by the mercantilist, mixed economy we live in. (Let's not forget, it's not laissez faire out there.)

Read of rest of my latest TGIF column at the Foundation for Economic Education website.

Cross-posted at Free Association.

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Anthony Gregory - 7/24/2006

I like this argument by BK Marcus:

". . . there are many on the economic Left who advocate excise taxes on cigarettes because they know that higher prices will discourage consumption of cigarettes. They want higher gas taxes to lower the consumption of gasoline. So why is it so hard to see that higher work prices will discourage the consumption of labor?"

http://www.ncc-1776.org/tle2004/tle283-20040808-04.html

Lisa Casanova - 7/24/2006

You're absolutely right about the debunking. Unfortunately, that study is a zombie in the minimum wage debate- it just won't die.

Sheldon Richman - 7/23/2006

We have to respond that there was one "study," a telephone survey of New Jersey fast-food restaurants. The Card-Krueger method was widely debunked. You'd be hard-pressed to find one other study that "shows" that a rise in the MW did not have bad consequences. That said, I have extended by discussion here.

Lisa Casanova - 7/23/2006

One big problem: whenever you argue that minimum wages are harmful, there's always, always someone who comes back with "but there have been studies done that prove the minimum wage doesn't cause unemployment!" As far as most people are concerned, as soon as they hear that, case closed.