Against the minimum wage
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| Author: Patrick Crozier |
| Permalink |
I am against the minimum wage because:
- it involves force ie if you don't pay your staff more than X we will hurt you, which I don't like
- it is difficult to prove whether it works or not
- it puts up the cost of employing people hence either (due to the laws of supply and demand) reducing employment or encouraging dishonesty
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Q&A
Encouraging dishonesty?
- Yes, because employers and employees will cook up schemes to make it look as if they are paying the minimum wage eg stating a lower number of hours than are actually worked, when they are not
Difficult to prove whether works or not?
- Yes. Difficult to prove in a growing economy that people are getting richer due to the minimum wage or the growing economy. Difficult to disprove because the minimum wage is usually set at too low a level to make anything other than a marginal difference
Why does this matter?
- Because if it cannot be proved that a law is doing good then the prejudice should be that it should be abolished
But such and such report says that the minimum wage didn't increase unemployment
- Perhaps it was this one. But this report also says that the minimum wage has a statistically insignificant effect on poverty. And, after all, isn't that what it is supposed to be achieving? More seriously, the report suggests that the main effect of the minimum wage is to reduce profits
Reducing profits is a bad thing?
- Yes, I'll come back to this
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Comments
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