Wages and the Free Market

The day that I ask a class of college students, "what determines a minimum wage?" and I get a correct answer, I will retire. I've been asking the question of these 18-20 years olds for more than a decade now and have yet to have a single one relate the minimum wage to the market value of the worker's labor.

Inevitably they bleat about cost-of-living, families of four and poverty levels. They look stunned when I suggest that raising the minimum wage is the surest way for a politician to gain votes without even spending a tax dollar. Simply mandate that a free enterprise business pay more.

If, I ask, $7.25 is better than $5.15 wouldn't $25 an hour be better still? Wouldn't they favor that? Occasionally a light will begin to dawn but with most of them immature greed trumps common sense.

Today, the federally mandated minimum wage goes up. Read this summary of the media coverage at Cato:

Wage Increases Not Enough Says Press

It's enough to bring a tear to my eye. My heart melts as I think of those poor single-mothers trying to raise their four children (all with different last names) on even this stipend.

Here's the Dallas Morning Fishwrapper's front page weeper:

It's a Drop in the Bucket

Poor Ms Greer! She became the sole provider for her three teen-agers when "her husband was sent to prison for parole violation..." Well, duh! Do we discern some bad life choices here? I would like to think that by the time a woman is 36 years old that she might have amassed enough work experience to be worth more than minimum wage. Notice that she lost her last job when her "sister-in-law commandeered her car" and she was late for work. Would that be the sister-in-law of the felon husband?

Did you read about the "receptionist" who is struggling to support a son and a mentally disabled granddaughter on $435 a month? So, where is the granddaughter's mother? Doesn't the son work? How many hours a month at $7.25? How about fifteen hours a week?

I wouldn't expect to support a family with that level of effort either.

Sorry, I can't support a mandated minimum wage at any level. It imposes an unrealistic burden on business, it costs jobs overall and it fuels inflation. That's as good as it gets.