I'm ten years burning down that road
Nowhere to run and nowhere to go
--Bruce Springsteen
In an open letter the Obama administration, George Reisman provides a simple ECON 101-based explanation of the negative effects of minimum wage laws. As we have observed many times on these pages, minimum wage laws are forms of compulsory unemployment.
As such, and as Prof Reisman observes, minimum wage laws are anti-labor and anti-poor. They force marginal workers to the sidelines.
If the goal is to raise standard of living of marginal workers, then the correct policy is to abolish the minimum wage and other policies (e.g., forced union pay scales, licensing) that block the path to economic improvement for poor people.
Money printing must also be stopped, as inflation disproportionately destroys the purchasing power of lower wage earners.
Subscribe to:
Post Comments (Atom)
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/charts/metals/gold/t24_au_en_usoz_2.gif)
1 comment:
Thinking has become so emotional and so politically biased on the subject of wages that in most discussions of them the plainest principles are ignored. People who would be among the first to deny that prosperity could be brought about by artificially boosting prices, people who would be among the first to point out that minimum price laws might be most harmful to the very industries they were designed to help, will nevertheless advocate minimum wage laws, and denounce opponents of them, without misgivings.
~Henry Hazlitt
Post a Comment