Freedom Conspiracy

Gary Greenberg's political blog: Promoting Agoranism, a system of political organization based on free trade, private ownership of property, voluntary contracts, and no soverreign governments.

The Minimum Wage is Always Zero

A major impact of the minimum wage laws is the large number of people that will be thrown out of work. A Congressional Budget Office study in 2014 indicated that a minimum wage increase to $9 an hour would cost 100,000 jobs, and an increase to $10.10 would result in the loss of over 500,000 jobs. Those are nation-wide figures. For people laid off due to minimum wage hikes, the minimum wage is always zero. And many lives will be thoroughly destroyed by the loss of the marginal income that enabled families to survive.

Often overlooked in these analyses and debates is that it is not only minimum wage earners who get thrown out of work, but also includes a large percentage of people who earn more than the minimum wage because management can no longer afford the differential between different pay levels for different skill sets.

In 2018, the NYC minimum wage went up to $13 an hour in the hospitality industry and had a devasting impact on the restaurant industry. In 2019, the rate goes to $15 an hour. Have you noticed the rapidly increased use of ordering kiosks in fast-food restaurants that replace many workers? Some places are now experimenting with automated burger-flippers. Wonder where that will lead.

It’s often argued that the low minimum wage does not pay enough for an individual’s survival. That people still take the jobs is evidence that this is not the case. In many instances, the wages received are increments to a family income that includes family members with other sources of income, sometimes from jobs that pay more than the minimum wage.


Reader Comments

  1. The minimum wage rules are less debilitating that Gary tells us. One reason is the informal economy. There are many people who learn less than the minimum wage, but do not have social security, medicare and income taxes deducted from their pay, making their pay greater than the net pay of those earning a minimum wage. The informal economy is also where illegal immigrants can participate in the economy. Purchasing from vendors who are part of the informal economy indirectly provides income to people who earn their income this way.

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