The Concise Guide to the Minimum Wage

by Jim Cox

 

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Introduction

  1. What's the Effect of the Law?
  2. Why Not Raise It Even Higher?
  3. "People Have to Have a Livable Wage"
  4. On-the-Job Training
  5. "How Could Anyone's Labor Be Valued at Less Than the Minimum Wage?"
  6. Minimum Wage is Actually Higher than $5.15
  7. "It's Easy for the Middle Class to Call for Abolishing the Minimum Wage"
  8. Organized Labor
  9. Impact on Young, Minorities
  10. Fixed Number of Jobs?
  11. Racism
  12. Supra-Marginal Firms
  13. The Sub-Minimum Wage Law
  14. 300,000 vs. 600,000 Jobs Lost
  15. Crime
  16. Mandated Wages, Not Mandated Jobs
  17. "Businesses Can Afford It"
  18. The Card-Krueger Study
  19. The Monopsony Model
  20. Current Pay in the Market
  21. What is the Source of Wages?
  22. Individual Freedom

References

About the Author


4. On-the-Job Training

Besides costing low-skilled people job opportunities, an even greater social injustice resulting from minimum wage legislation is the destruction of on-the-job training. Most employees make wage gains on the job not due to formal training but from working and proving themselves to their employers. But for low-skilled workers whose labor is not valued at the legally required minimum wage there is no job from which to gain training. Low-skilled workers need to be able to start at a wage which matches their skill level so that they can then make the same gains on the job from working and proving themselves to their employers that higher-skilled workers enjoy. As an analogy, the minimum wage is like knocking out the lowest rungs of a ladder. For tall people who can step up to the fourth rung readily this is no hardship. But for those who are only capable of reaching the first rung to begin their climb the missing rungs are a tremendous burden.

Higher-skilled workers (and those sympathetic with the notion of minimum wage legislation) need to be understanding of the plight of those less capable than themselves. As a general principle, people must have the opportunity to be bad at a task in order to ever become good at it. This applies in the job market as well as all other endeavors in life. An analogy would be an eight-year-old wanting to learn to play baseball. If the coach first set a minimum ability above this player's beginning skill level such as requiring the successful fielding of 6 out of 10 grounders, the new player obviously would not qualify for further practice and would never become a good baseball player.

 
 

The Concise Guide to the Minimum Wage © 2003 Jim Cox