From Don Boudreaux at Cafe Hayek, a very challenging and novel question for proponents of a higher minimum wage:
I have a question for anyone who believes that a nearly 25-percent hike in the minimum wage (from $7.25 to $9 per hour) will not harm low-paid workers. Suppose the government were to mandate, not an hourly minimum wage, but, instead, an hourly minimum break time. Specifically, suppose Uncle Sam were to oblige employers to force each worker earning less than $9.00 per hour to take at least 15 minutes of break time each and every hour. Is it plausible that employers would continue to pay their low-wage workers for 45 minutes of work per hour the same wage that these employers paid for 60 minutes of work per hour?
Does anyone seriously doubt that employers would respond to this mandate by reducing these workers’ hourly pay, by replacing many of these workers with machines, by working these employees 33 percent harder or faster, or by otherwise adjusting to the higher costs imposed by a mandated minimum break time in ways that reduce the employment options and benefits available to low-paid workers?
Assuming that everyone of sense sees that a mandated minimum break time would prompt employers of low-skilled workers to adjust in ways detrimental to those workers, why do so many people of sense deny the reality that a mandated minimum wage – which is nearly the same beast as a mandated minimum break time – prompts the very same sort of adjustments by employers?
MP: In a previous CD post, I outlined some of the ways that a higher government-mandated minimum wage would be detrimental to low-skilled workers.
In another post at Cafe Hayek, Don points to economist Dwight Lee’s editorial yesterday in the WSJ (“A Higher Minimum Wage – but Not for Interns in Congress“) that (in Don’s words) “highlights the hypocrisy of politicians who, in one breath, boast of the great benefits that their offices’ unpaid internships offer to young men and women, and who then, in their next breath, pontificate self-righteously about how their support for a higher legislated minimum-wage is evidence of their special concern and care for low-skilled workers,” here’s an excerpt:
The president and other champions of a higher minimum wage clearly recognize the value of entry-level work. Washington interns do much of the phone-answering and mail-processing chores that await first-time jobholders in offices across the land. An entry-level job is much more important for many young people than making a little summer money. It is the best opportunity they have for getting the training to develop skills they need to earn a good income later in life when they will have more financial obligations.
Increasing the minimum wage would make this path to a better financial future harder than it needs to be for the young people who already face the most difficulty. These are the young who don’t have the advantages of a stable family life, parental role models at home, and teachers in good private or public schools instilling in them the joy of learning.
As an example, see Minnesota Senator Al Franken’s website here that describes internships available in his offices in Washington and Minnesota, ending with the sentence: “All internships are unpaid.”