Thursday, November 6, 2014

The Economic and the Moral Case Against Minimum Wage Laws: Perfect Together

A 7/29/14 New Jersey Star-Ledger letter by Joseph F. Benning (Wage Hike Fallout) offered a very good condensation of the deleterious effects of minimum wage laws from an economic theory perspective, including the all-important role of incentives in economic activity. Benning also makes this economic point, which connects to serious moral implications:

And while it is true that some people will receive higher wages, it will be at the expense of others who will be fired or never hired.

The immoral is the impractical. The artificially higher pay of those lucky enough to keep their jobs is in effect blood money, extracted by force not just from employers but also would-be workers condemned to unemployment. This short letter is well worth reading.

I left these supportive comments:

Well said. And to those who would refute the truth of Benning’s letter, I pose this personal question: Is cost ever a consideration in your consumer spending decisions? Of course it is. So why wouldn’t it be any different for employers, in effect the consumers of labor?

More fundamentally, minimum wage laws are immoral, because they violate the rights of individuals to act on their own judgment in pursuit of their life values. The freedom to act on one’s judgment is the essence of liberty. The government’s proper job is to protect, not violate, individual rights, including the fundamental rights of employers and employees to negotiate mutually acceptable terms of employment, and contract on that basis without interference from his fellow man, including law-making government officials.

Minimum wage laws are economically destruction and morally corrupt, because contrary to the fundamental principles of liberty.

Related Reading:

Kristen Bell’s Spoonful of Coercion—Ari Armstrong

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