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


20. Current Pay in the Market

Pay rates in the market clearly refute one basis of support for the minimum wage law -- that employers would pay only some minimal amount to low-skilled workers; telling them in effect: "take it or leave it." Labor is a valuable resource and therefore will command a commensurate wage. There is no employer power to underpay workers any more than there is an employer power to underpay for land or bricks or paper cups used in their businesses. What protects workers from some ridiculously low wage offer is the fact that their labor is valuable to employers, and the competition among employers for their labor. Currently, many entry level workers are being offered significantly more than any legally required minimum for their hourly labor. If the argument that the minimum wage is necessary to protect workers from pitifully low wages were valid, then no employer would waste funds ever paying more than that legal minimum. For that matter, no one would make more than the minimum wage if this claim for the need for the minimum wage were valid -- not accountants, or movie stars, or professional athletes, no one -- but they do. How come? Again, the fact is that their labor is valuable to employers, and employers compete with one another to acquire that valuable labor.

 
 

The Concise Guide to the Minimum Wage © 2003 Jim Cox