Insight from Cafe Hayek patron Regan Taylor:
Minimum wage logic: raising the minimum wage to (at least) $10.10/hr will be good for minimum wage workers. It will put more money in their pockets spurring economic growth.
A few years ago, the federal govt bailed out General Motors. Instead of engaging in such a gross display of corporate welfare, why didn’t we just apply the same logic to help the auto giant? If raising the MW from $7.25 to $10.10 (a 39% increase) helps those who sell their labor at that price, why didn’t the govt pass a law that mandated that all auto firms raise the price of every car, van, SUV, and truck they sell by 39% also – or at least raise by 39% the price of their lowest-priced models? Is there a fundamental distinction between the applications of this logic that says it will help one group but harm another? If the mandated increase benefits those who sell labor at that price why wouldn’t it be beneficial to do the same for those who sell automobiles? Or tennis shoes? Or computers? Or any other industry?
Why do so many people believe that the laws of supply and demand apply to everything that is bought and sold EXCEPT labor?!