My Case against Minimum-Wage Laws
Minimum-wage laws are again in the news, as Joe Biden and his political allies in Congress seek to push the national minimum from its current level of $7.25 per hour up to $15 per hour. Some politicians, Sen. Bernie Sanders for one, declare that people can barely survive even on $15 per hour. If the law takes the minimum up to $15, we can expect pressure to raise it still further in the future.
After all, why shouldn’t the government be compassionate and improve the lives of millions of low-wage workers? Many Americans think that’s one of the reasons for democracy—so that the government can respond to people’s needs.
There is a great deal wrong with minimum-wage laws and I’d like to set forth my case against them. I’m not just against the current move to raise the wage, but against the very concept of laws dictating the terms of contracts between people.
Whenever two people agree on a contract for goods or services, they have peacefully consented to the deal because both expect to be better off as a result. Peter might agree to pay Paul $50 to clean the leaves out of his gutters; Jennifer might agree to pay Jane $8 per hour for cleaning up her restaurant. All four are satisfied. They would probably prefer to receive more or pay less, but they are content with their contracts.
No other person has any right to interfere with them. If Joe were to threaten violence against Peter unless he pays Paul $60, or if Nancy were to threaten violence against Jennifer unless she pays Jane $9 per hour, they would be guilty of a violation of the criminal law.
But if the threat comes not from meddlesome citizens like Joe and Nancy, but from the government, that is supposed to make threats of force all right. When governments enact minimum-wage laws, or increase existing minimum wages, that’s what they are doing—threatening to use force against peaceful individuals for not paying what government officials have decreed to be enough. Unfor
Article from Mises Wire