29 March, 2005

Minimum Wage, Maximum Folly by Walter Williams -- Capitalism Magazine

An excellent article from Walter Williams:
Plus, according to the Bureau of Labor Statistics, only 2.2 percent of working adults earn the minimum wage.

The crucial question for any policy is not what are its intentions but what are its effects? One of its effects is readily seen by putting yourself in the place of an employer and asking: If I must pay $6.25 or $7.25 an hour to whomever I hire, does it make sense for me to hire a worker whose skills enable him to produce only $4.00 worth of value per hour? Most employers would view doing so as a losing economic proposition.

Thus, one effect of minimum wages is that of discriminating against the employment of low-skilled workers.

Minimum Wage, Maximum Folly by Walter Williams -- Capitalism Magazine

I once heard a discussion about the minimum wage where an analogy compared the job market in the United States as being a ladder to climb. Minimum wage is the first rung of that ladder. The starting point. Now, if the job market were a bed....
(Inspired by Jim Rohn)

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