I am going to spend some time on my soap box this week. I have always been against the minimum wage law, and this weeks reading has only reinforced that.
This weeks reading of New Deal or Raw Deal? included a discussion of FDR's push for a minimum wage. FDR citied the need for the poor to have more money. If businesses were required to pay employees more, then the poor would have more money to spend on food, clothing, and other items. Minimum wage laws (in both the 1930's and today) illustrate one of the greatest problems with liberal and progressive ideas: They look good on the surface, but they fail the moment any real thought is put to the idea.
First, minimum wage laws violate the freedom of both employees and the businesses they work for. Employment contracts represent an agreement between two parties that they both freely enter into. If I am willing to work for $1.00 an hour bagging groceries, and an employer is willing to pay me $1.00 an hour, why should anyone else be involved? Why should the government be able to step in and violate that contract simply to make a few elected representatives feel better?
Secondly, minimum wage laws don't work. Regardless of what laws are or are not passed in Washington, any employer can only spend so much on payroll. If Washington insists that the employer pays his employees more, that employer will be forced to reduce the number of employees he has. Worse, minimum wage laws hit the poor, and those with the least marketable skills the hardest. A good business isn't likely to fire his best employees. He's going to fire those employees that have the fewest skills. Once those employees loose their job, it's hard to find a new job. Other businesses are also firing those employees with the least skills.
For Next Week. I want to read up to Chapter 13. Also, this will be my last book leading the book notes project. If you would like to take it over, let me know. I expect to be done with this book in another three to four weeks. Have a good week.