Repeal Minimum Wage to Grow Jobs

People need to have a job- they need to do something good for society and feeling good about themselves and paying taxes and being a productive member of society and not just be a recipient of the forced generosity of those who do work in society. And one policy change that the federal government and state governments that they could implement that would lead to more people having a job is to lower or repeal minimum wages.

Dr. Gary L. Wolfram, a Professor in Economics and Public Policy at Hillsdale College, wrote in an editorial that was in the Detroit News called Grow jobs, repeal the minimum wage:

...If we could make the poor better off by simply increasing the minimum wage, why not a minimum wage of $1000 per hour?

The U.S. unemployment rate among16-19 year olds is a staggering 25 percent. In Michigan, 28 percent. That's a recipe for frustrated youths. Often they end up in the underground economy, selling drugs.

It has been estimated that nearly half of Detroit's adult population is functionally illiterate. Michigan's minimum wage keeps these unskilled workers from gaining employment and is partly to blame for the city's high unemployment.

If there were no minimum wage, however, then producers could hire the unskilled and train them. Those of us old enough to remember gas station attendants who washed car windows also remember that many a young person got their first job pumping gas. They learned important job skills that improved their productivity and let them move on to higher-paying occupations.

The minimum wage increases of the last 50 years have eliminated these and other entry level jobs and kept large number of the unskilled dependent upon government for subsistence.

Aside from the harsh unintended consequences, there is also a principle of individual liberty at stake. If you are willing to pay me for my labor at the rate we agree upon, then why should the government tell me that I cannot sell you my labor? Why should a state or local government be able to tell me that I cannot work because I can't produce $7.25 or $7.40 an hour worth of goods and services? Individual freedom depends on the right to one's own labor.

It's time that we restored one of our fundamental freedoms by ending the minimum wage.

These are the very points that I made several months ago in my own editorial, a blog post called Higher Minimum Wage Laws Have Resulted in Higher Unemployment Rates? In that post I wrote:

But let's say some do-gooder government bureaucrat making 100K/year comes along and thinks that it isn't fair that you are only getting paid the amount that you and your employer both voluntarily agreed upon. This person decides that everyone should now be paid $10/hour, and then pats themselves on the back for making the lives of all of these low-skilled laborers better. The store owner now has a choice- increase the amount of money that they budget for 'sales staff' or hire less people. If they just let their store slip a little in looks, have less staff available for help, automate some of the things that people did better, and not have friendly greeters, business will suffer- but so will the competitors too, so the only real loser will be all of society. If they instead just keep their 'sales staff' budget at $50 and simply cut back the number of employees who work, those employees will have to work harder and there will be more demands on their skill level, but that's okay- there are plenty of people willing to work for $10 hour. Our good businessman now fires all 10 people, re-hires 5 new people with more skills (probably older people with degrees in useless subjects), and moves forward with a store that is lesser than before.

The end result of raising minimum wage in this theoretical exercise will result in higher unemployment, especially in those groups with lower skill levels, and stores that are less appealing.

I don't have any hard data on whether stores are less appealing today than they were back in the old days- myself, I think that it is, with more 'self-checkout' operations, less helpful staff, less personal service, and stores that are less straight and clean. I do have hard data on unemployment rates...

Oh, I know that many out there feel that any job that doesn't pay someone enough to live a life of luxury is a job not worth having- many liberals and progressives are sure to comment that 'you can't feed your family on a sub-minimum wage'. Maybe you can't, but you can feed them a lot better on a sub-minimum wage than you can on no-wage, and while you are doing that you will be doing something productive for our society, earning important job skills, and even giving a little back to society in taxes. Perhaps you need some assistance after that, but that's not the point here- the point is that minimum wage laws act as a barrier for good things happening for those who don't have jobs.

And those people who earn minimum wage right now are usually not earning that wage for a long time- they use their increased skills to secure wage increases and better opportunities and go forward from there, or if they don't, they likely are lucky that they are protected from competition by these laws that artificially force employers to pay them rates higher than they honestly deserve.

Let's be honest- in the name of making themselves feel better because they are guilty for being successful when they really don't deserve it, many liberals and progressives put in place policies that harm those in our society who need the most help; they put in place minimum wage laws that prohibit people from freely making contracts regarding their labor and wages, they put in place controls on businesses and individuals which hurts their attempts to increase their property and wealth, and they make the lives of those who they force to suck down forced charity a little bit less.