"Here, Bear this Extra Burden, You Low-Skilled Worker. It Will Help You!" (by Don Boudreaux)
CAFE HAYEK
By Don Boudreaux on Work
Plenty of politicians, pundits, and preachers are applauding today's hike in the national minimum-wage from $6.55 per hour to $7.25 per hour. Too few pause to ponder the fact that this hike means that Uncle Sam has arbitrarily raised the hourly cost of employing low-skilled workers by 10.7 percent -- a policy move always unwise, but especially regrettable when unemployment is rising.
Each semester I ask my principles-of-economics students if they think that I would rejoice if Uncle Sam passed a minimum-salary statute for economists, mandating that every economist employed be paid at least $300,000 annually. (I would, of course, very much love to earn this much money annually by teaching economics.) I then explain that my more talented and accomplished colleagues, such as Tyler Cowen and Walter Williams, would surely benefit from such a mandate. I, in contrast, would lose my job. |
