mad anthony

Rants, politics, and thoughts on politics, technology, life,
and stuff from a generally politically conservative Baltimoron.

Thursday, June 24, 2004

Legislate yourself to riches...

Minimum wage laws are always one of those things that it's hard to be against without looking like a jerk. After all, who can live on $5 an hour? One simple law and we can in theory make poor, hardworking people better off.

Except that it doesn't work that way. When you raise the price of a commodity (and one of the few things that Marx was right about is that labor is a commodity), quantity demanded goes down. So you put a price floor on a unit of labor, and quantity demanded goes down. Except when quantity demanded of widgets goes down, you have a wharehouse full of widgets. When quantity demanded of labor goes down, you have unemployed people - the very same unemployed people that minimum wage laws are supposed to help.

Opinionjournal has a great article about minimum wage laws.
Some interesting facts:
-Only 1.5% of the work force is paid minimum wage or less
-More than half of people earning minimum wage are under 25 years old - so they are entry level young workers
-More than 60% of workers are hospitality or service workers, who frequently recieve tips in addition to wages
-One third of minimum wage earners live with a parent or reletive - so they aren't supporting their families on their minimum wage job, but rather being supported by their family


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