Real Benefits of a Minimum Wage November 14, 2006Posted by federalist in Economic Policy, Government Regulation.
I didn’t think there could be any market benefits to a minimum wage, but one Tom Bundorf (letter to the WSJ today) suggests a compelling silver lining to this cloud:
1. Fewer low-skill employee opportunities influencing younger unskilled workers to stay in school to get skilled enough to get a good job.
2. Higher productivity. More use of machinery to do the hand labor. Imagine inserting $2 in a slot to get your McDonald’s quarter-pounder. There will be a couple of skilled workers to run the machines.
3. More underground, off-the-books labor at the market price. No taxes, no bookkeeping. A truly free economy.