Jordan Setayesh’s article, The minimum wage doesn’t do what you think it does, over at the Mises Wire, reminded me of how utterly misplaced society’s adoration of the minimum wage truly is. Not only does the minimum wage not help those that actually need help, it does the complete opposite: it ensures that the most vulnerable among us, whether it’s minorities, the disabled, those with a criminal record, etc., are denied an opportunity to find employment. The minimum wage has this effect because it grants a much larger amount of power to employers to discriminate. An opportunity to earn a higher wage creates a larger pool of unemployed labor, which creates a greater ability to discriminate as to who gets hired. A higher wage will attract more applicants who aren’t minority, disabled, or ex-felons. The employer will then hire those and reject the applicants who most desperately need a job.
That’s the theory in a nutshell, yet the minimum wage is trumpeted to the heavens as the beau ideal of the goals of public policy.
And what always must be remembered is that the real minimum wage is zero. Artificially setting a floor on the price paid to workers condemns those most in need of some type of employment from finding it. The minimum wage creates a permanent underclass of the criminally poor and should be thoroughly discredited as a policy worthy of a free society and tossed into the same stinking heap as the drug war is slowly being consigned to.
