quarta-feira, maio 07, 2014

The Minimum Wage Is Cruel

The Minimum Wage Is Cruelest To Those Who Can't Find A Job:
The minimum wage is unfair to low-skilled workers with little experience because it prices them out of the labor market and prevents them from achieving the upward mobility that is the hallmark of a dynamic free-market economy.
The minimum wage violates the principle of freedom because workers are not permitted to work at less than the politically determined wage rate, even if they are willing to do so to get or retain a job—and employers are prohibited from hiring them. The minimum wage does nothing to increase the productivity of low-skilled workers. Indeed, it prevents them from acquiring the skills and experience they need to move up the income ladder. Discouraged workers may then drop out of the workforce and end up on welfare or drugs.

The self-esteem that comes from work and responsibility is an important aspect of growing up and taking part in the American dream. When government prevents workers from competing for jobs and prevents employers from hiring them at mutually agreed upon wage rates, politics trumps freedom—coercion trumps consent. Wealth creation is reduced and entrepreneurship stifled.
Rich countries were first poor. It was because of economic freedom and better institutions that they became rich—not because of minimum wage laws. The number of jobs depends on relative wage rates, other things constant. If changes in technology, institutions, and capital per worker increase productivity, then over time both employment and output will increase along with real incomes. If those other factors don’t change and the government simply dictates higher wage rates, then jobs will be lost or not created for lower-skilled workers.

A “fair wage” is a “free wage”—that is, one that results from voluntary exchanges among workers and employers. Government should prevent fraud and violence and allow individuals to enter into mutually beneficial exchanges under a just rule of law that protects persons and property. The minimum wage violates freedom of contract and hence private property rights; it is neither moral nor effective. It is unfair to workers who can’t find a job, especially young workers in search of a better future.

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