Minimum WageCommentary by Pete du Pont
January 31, 1997
People opposed to the minimum wage come off sounding like heartless cranks. But that's only because those on the other side put politics above real life.
So one more time, here's why it's a bad idea.
As reported in Investor's Business Daily, the Los Angeles city council wants to force firms that do business with the city to pay employees "a living wage." They have determined that to be $7.50 an hour for companies with health benefits, $9.50 an hour for those without.
But the law almost willfully ignores an economic fact: you have an employee whose output is $6.75 an hour. Now, you have to pay him $9.50 an hour. You lose $2.75 an hour. What do you do?
Some employers will have to let people go. The law will also cause other employers not to add jobs they might have contemplated. And this happens just as people are going off welfare and looking for work -- typically for just the kind of jobs this mandate will help eliminate.
Minimum wage laws may make great politics. For low-wage earners looking for the first run on the economic ladder, they're lousy policy.
Those are my ideas, and at the NCPA, we know ideas can change the world. I'm Pete du Pont, and I'll see you tomorrow.
Host outro: On Monday, Pete du Pont visits the Junk Science page on the Internet.