Minimum Wage Laws Versus Freedom (2015 Feb)

by Barry A. Liebling

When the minimum wage was raised in 21 states at the beginning of 2015 leftists had a reason to be pleased. The new rules represent movement towards a prize they are perpetually seeking – growing the power and influence of government in everyday life. While each state has had minimum wage laws for a long time, the act of adjusting them upwards is a symbolic affirmation that the government, guided by wise busybodies, is the muscular overseer that decides how much people get paid for their work.

Of course, the architects of minimum wage laws know that “more government, all the time” is not the best way to sell their agenda to most Americans. Many people, perhaps a majority, bridle at the prospect of having the state tell them how to run their personal affairs. So leftist progressives market minimum wage laws as being altruistic – asserting that higher pay requirements will benefit workers who are currently taking home the least money. Progressives understand that appeals to altruism (a fatally flawed notion, but that is a discussion for another column) is often an effective way of quashing criticism and resistance. To someone who is gulled by the altruism scam any political action – no matter how obnoxious – is justified if it benefits someone else. Terrible consequences (intended or unintended) are excused if the perpetrator pleads he was not motivated by selfishness but was instead “nobly” trying to help other people.

Of course, there are free market advocates and conservatives who – on principle – oppose additional minimum wage legislation. But many of them fall into the trap set by the leftists. They cave in to the premise that the law is good if it helps some low-income workers. Then they focus all their attention on that topic and rebut progressive opponents with “pragmatic” economic arguments. Conservatives typically cite the classic economic principle that if you make something more expensive (that is, employing entry level workers) – all things being equal – less of it will be purchased (fewer workers will be hired). Raising the minimum wage will benefit some low-earners, but it will hurt others. It discourages businesses from keeping or bringing in workers at the lowest pay level.

And there is no shortage of empirical studies that support the conservative opposition to raising the minimum wage. Numerous surveys show that when a regional government mandates higher hourly pay, employment rates goes down. But in the real world all things are generally not equal. Employment is influenced by many other factors besides the legal lower limit of worker pay – such as skill level of workers, types and vigor of firms in the vicinity, and the plans of business owners. Leftist pundits search for, and are able to find, instances where the minimum wage was increased but the proportion of people employed did not decrease.

So the debate over minimum wage laws has evolved into a back and forth “does so, does not” harangue between leftists and those sympathetic to free market principles. Notice that this sort of contest favors the progressive left. Every time they want to goose the minimum wage upward (to demonstrate that they are in charge) they will assert that they are helping the less fortunate and that there are studies that show the employment rate will not necessarily degenerate.

How should free market advocates address the minimum wage issue? They have to pull back and emphasize the crucial issue – freedom. The economic harm that is a consequence of minimum wage laws is genuine, and it is worthwhile to continue reporting it. But economic considerations are derivative to the more fundamental topic of liberty. When an employer and a potential employee meet there is only one fair way to decide how much the employee will be paid and that is by mutual consent. No third party – whether it is a leftist meddler or the meddler’s state-sponsored surrogate – should violate the freedom of the employer and employee to find a solution that satisfies each of them. The only proper (and essential) role for the government is to assure that no force or fraud is permitted in reaching the agreement.

When free market enthusiasts respond to rants for raising the minimum wage there are important advantages to focusing on liberty. It leads to the insight that the core question is not whether (or how much) the government should increase the minimum wage. Instead it is how to extricate the government from tampering with decisions that ought to be private. It exposes leftists as being unsympathetic to the principle of liberty – a trait that many people may not have noticed. Most important, it informs (or reminds) the public that individual liberty is essential and must not be violated.

*** See other entries at in “Monthly Columns.” ***

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