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


13. The Sub-Minimum Wage Law

One revision to the minimum wage law that was considered during the 1980's was the idea of a sub-minimum wage for those under the age of 21. The motivation for this movement came from a number of the larger cities' Black mayors. Black teenage unemployment in these cities -- Washington, D.C., Gary, Indiana, Newark, New Jersey, and others -- was running in the range of 55% or more. It became so obvious that the cause of these atrocious rates of unemployment in this population was due to the minimum wage law, that these mayors were calling for a relaxation of the law. They realized that if it were legal to pay a lower wage to teenagers, many more teenagers would find gainful employment, helping their families and staying out of trouble. Though this proposal was ultimately not successfully implemented, it did have the virtue of acknowledging the ills of the minimum wage law. However, the reasoning which leads one to call for a sub-minimum wage for teenagers to keep from destroying their job prospects is exactly the same reasoning which should lead one to call for the elimination of the minimum wage law itself. So, is the sub-minimum wage law a good idea? Yes, but only as a first step to the elimination of the entire notion of a minimum wage law!

 
 

The Concise Guide to the Minimum Wage © 2003 Jim Cox