Politicians in both parties find reasons to applaud minimum-wage laws. They purport to have good intentions — “Lifting struggling workers out of poverty” is the usual line — but what are the results?
In this AIER article, David Hebert points out that minimum-wage laws caused havoc in the labor market:
What minimum wage advocates won’t acknowledge — at least openly — is that wages are a price, specifically the price of labor. By proposing minimum wage increases, lawmakers around the country are effectively telling employers, ‘We want you to hire fewer workers.’ Yet, when employers respond to this implicit edict by laying people off, blame is shifted to a myriad of superfluous explanations, none of which address the cluster of closures around the dates that minimum wage legislation takes place.
It’s also perfectly clear that when states increase their minimum wages, some workers lose their jobs, and workers who have low skills and productivity never get a chance at a first job. Don’t the compassionate pols care about them?
Herbert offers this explanation:
Perhaps lawmakers are so divorced from reality as to not see what is happening all around the country. More likely, they arrogantly believe that this time will be different; that their version of a minimum wage will work where every other has failed. Unfortunately, this is what every previous lawmaker believed, too. Just like them, today’s lawmakers will find that the laws of economics are as immutable as the law of gravity.
True enough, but I’d say that the problem is that it’s much more important for politicians to appear to be caring than to actually do something to help the poor. They can trumpet their supposed compassion to clueless voters who don’t suffer the adverse effects of their meddling with the spontaneous order of the free market. Politics is mostly theater, and raising the minimum wage is a marvelous deception that never harms the people who make the laws.