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What to ask minimum-wage supporters

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On January 1, the minimum wage went up to $9.10 in Oregon. You may have also seen calls to raise the Federal minimum wage. This article is dedicated to what to ask people who support minimum wage:

1. Do you believe the minimum wage exists independent of the laws of supply and demand?

If they say, "Yes", you're dealing with someone who cannot be reasoned with. The laws of supply and demand, like the law of gravity, cannot be "broken."

If they say, "No", go on to question 2.

2. Do you believe the demand for workers is perfectly inelastic? In other words, do you believe employers will hire the same number of workers, and the same type of workers, no matter what they have to pay?

If they say, "Yes", ask them why movie theater ushers, and fuel attendants (absent a law mandating them) have disappeared? Do they think customers want to find their seats in the dark, or get out of their car and smell the fumes? Of course not! The minimum wage has simply rendered such jobs not worth the cost.

If they mention that the effect on the unemployment rate from minimum wage increases is slim to nothing, show this: http://www.antolin-davies.com/conventionalwisdom/minwage.pdf. Just because the forest seems unchanged, does not mean the trees are unchanged. Minimum wage increases have little to no effect on college graduates, but for those with just a high school diploma, or not even that, the effects are far greater. If they understand now, go onto "No".

If they say "No," mention these few points:

A. The only weapon unskilled workers have against skilled workers is a lower wage demand, similar to how a low-quality product competes against a high-quality product through a lower price. Why forcibly price out unskilled labor?

B. The people most affected by A are the inner-city youth, thereby increasing the disparity between rich and poor. For teenagers, a job is much more than pocket change. It's a chance for on-the-job training to boost their productivity in the future. Instead they get into the habits of the street and crime.

C. The minimum wage hurts small businesses. Why does Wal-Mart supports minimum wage increases? Because they can absorb the cost increases and smaller businesses can't, so it adds their monopoly power. Amazingly, people who tend to support the minimum wage also oppose Wal-Mart.

D. The minimum wage encourages outsourcing jobs to other countries, thereby reducing available jobs here

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