Minimum Wage Insight

Thomas SowellThomas Sowell offers some insight to the minimum wage arguments put forth by the Left in an article, Fact-Free Liberals: Part II.

It is very obvious that the Left desires to improve the distribution of income and create jobs.  They certainly profess their desires often enough.

Mr. Sowell points out that they are prone to grab on to any statistic or example that supports their position, simply because they want that result to be fact.  At the same time they will argue with great passion against any empirical evidence that is counter to their belief.

A great example from his article is “it is surely no coincidence that those few places in the industrial world which have had no minimum wage law, such as Switzerland and Singapore, have consistently had unemployment rates down around 3 percent. “The Economist” magazine once reported: “Switzerland’s unemployment neared a five-year high of 3.9% in February.”

It is surely no coincidence that, during the last administration in which there was no federal minimum wage — the Calvin Coolidge administration — unemployment ranged from a high of 4.2 percent to a low of 1.8 percent over its last four years.

It is surely no coincidence that, when the federal minimum wage law remained unchanged for 12 years while inflation rendered the law meaningless, the black teenage unemployment rate — even during the recession year of 1949 — was literally a fraction of what it has been throughout later years, as the minimum wage rate has been raised repeatedly to keep up with inflation.”


Minimum wage laws simply create unemployment.  They put an absolute limit on the value of labor, eliminate ‘starter jobs’, and encourage companies to ‘automate’ or seek lower cost labor in other parts of the world.

The resulting increase in welfare needs, increased government spending create more borrowing and a slowing economy.  Eventually this leads our government to print more money and deflating the value of the dollar.  This invariably leads to a cry for a higher minimum wage.

The viscous circle continues with no end in sight.

Will we ever have the will to stop the minimum wage debacle?  Probably not, it is simply too easy and generally popular for politicians to give in to the false promise of a minimum wage.

WordPress Plugin Share Bookmark Email

Leave a Reply

Your email address will not be published. Required fields are marked *