Minimum Wage Means a Minimum Economy

Imagine if the government passed a law making low-paying jobs illegal. Let’s say any job paying less than $10 an hour is now illegal.

Would you support such a law? Why or why not?

If you opposed such a law, you’d probably say, “It’s between employees and employers. It’s not the government’s business.” Or, you might say: “Those jobs will simply go away. The people whose jobs are now illegal won’t have any work at all.”

Yet this is exactly what Obama proposes when he demands an increase in the minimum wage law.

Without reason or facts on their side, supporters of the minimum wage law will attack you as racist if you’re against it. They will say that many low-paying jobs are held by blacks or other racial minorities, and to oppose “giving them a raise” is the equivalent of racism.

“Blacks disproportionately left the labor market,” said Dean Baker, co-director of the Center for Economic and Policy Research, a liberal economic outfit, “with the labor force participation rate for African Americans dropping by 0.3 percentage points to 60.2 percent, its lowest rate since December of 1977. The rate for African American men fell 0.7 percent to 65.6 percent, the lowest on record.”

One has to wonder: If full employment for racial minorities (or anyone) is really their goal, then why do advocates of the minimum wage call for legislating those jobs out of existence?

The premise of the minimum wage law is that employers who currently pay “X” dollars per hour for a job will continue to keep the employee, even if his or her wages now are mandated to become “X plus Y” dollars per hour.

Such an attitude betrays a complete ignorance of how any business works. Any business exists, first and foremost, to make a profit. If a business profits from the labor of an employee by paying that employee a certain rate, the job will continue to exist. If the government forces a business to pay an employee more than he or she is worth, or more than the business owner was previously able or willing to pay, then — in the interest of keeping the business profitable — the job will go away.

Perhaps the employee will be fired when the minimum wage increases; or perhaps the employee will be kept, but some new employee will never be hired, because some new job will never come into existence due to the minimum wage law (not to mention piles of other government regulations and mandates heaped on private business enterprises every day.)

Supporters of the minimum wage, again lacking reason or facts, reply in moralistic terms: “You should put people first, not business.” But the two are inseparable. If you harm the business’ ability to make a profit, you’re harming the people who work for the business. No business and no profit? Then no employees, no people! This is not rocket science.

The truth? It’s not only bad economics, but bad morality to support the minimum wage. Employers have a right to operate their busineses as they see fit. Employers and business owners are the ones taking the risk and who possess full responsibility for their company or enterprise. Similarly, employees have a right to sell their services in a private market unencumbered by the Big Fist of government.

The growing number of unemployed people — in racial minorities, most of all — who will not find a job are entitled to sell their services in an unrestricted market. Perhaps they’d rather work than live off government aid. Perhaps, deep down, advocates of minimum wage (and other government mandates) are less concerned with people working than having more dependent on government aid. They’re never put on the defensive for this, while advocates of the free market are always called racist, haters, and all manner of irrational, ungrounded things.

Mealy-mouthed conservatives typically reply to increasing the minimum wage with the claim, “It should be left to the states.” The implication is that in Nebraska or Alabama the minimum wage will not be economical or moral, while in New York or California it might be.

But regardless of where the law is imposed, the minimum wage destroys jobs and prevents jobs from coming into existence. Principles of economics — and morality — cross state and national lines. The minimum wage is economically bad and morally wrong wherever and whenever it’s imposed — as are all such restraints on the free and private marketplace.

Be sure to “friend” Dr. Hurd on Facebook. Search under “Michael Hurd” (Rehoboth Beach DE). Get up-to-the-minute postings, recommended articles and links, and engage in back-and-forth discussion with Dr. Hurd on topics of interest.