Tuesday, July 28, 2009

Minimum Wage - An Attack on Unskilled Laborers

I wonder if any economist actually contests this theory. I'm sure some politicians may actually believe they are helping people, they are generally not well informed on economics - at least, not based on what they say out loud.

http://www.cafehayek.com/hayek/2006/06/ideology_and_th.html

Dr. Boudreaux's logic:
"I’ve never heard of a supermarket that seeks to clear out excessively large inventories of canned peas or laundry detergent by raising the prices it charges for these items. I’ve never heard of a construction contractor who believes that the higher the price he asks to do a job the more likely he is to be awarded the contract for that job. I’ve never encountered a car salesman who, upon my rejecting the price he asks for a car that I just test drove, says “Okay, okay. I’ll talk to my manager and ask if he’ll accept an even higher price for this baby.” I don’t encounter advertisements by merchants bragging that their prices are the absolute highest in town -- guaranteed!"

Thus when we violate liberty by restricting the terms under which citizens may choose to labor for or employ each other, we injure those who most need to find employment - those with low skills and the least to offer in the workplace.

It's laws like this that have led to 25% unemployment for those under 25 in France. Wonder if those who are not hired, or who's positions or eliminated due to this attack on liberty, will realize who screwed them.

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