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Thursday, August 01, 2013
Latest Op-Ed: How to Help Fast-Food Workers
Doubling the minimum wage may seem like a good way to help fast-food workers, but it would hurt them instead. So what should we do? We must sweep away the government-created barriers to income earning, barriers that protect established businesses from competition and rob the most vulnerable people of options.
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5 comments:
Do you have any hard data proving that workers are better treated by bosses when there's no minimum wage, or are your claims solely based on conjecture?
As the article points out, what encourages employers to treat workers better is an abundance of alternatives for workers -- from other employers, self-employment, and, I should add, worker-owned firms. It's a simple matter of self-interest on the part of employers. Anything that makes it easier for a worker to leave a job encourages employers to be nice.
My point about the minimum wage addressed a different matter. A minimum wage that prices workers out of jobs does those workers no good because it reduces alternatives.
Let me add one more thing: We can find a connection between the minimum wage and how employers treat workers. Free-market economists have shown that raising the minimum wage may not always eliminate jobs. Under some circumstances, employers find it preferable to preserve the jobs and make up the added expense of those jobs by downgrading working conditions: less on-the-job training, fewer work breaks, running the air-conditioning less frequently, etc. Repealing the minimum wage therefore would remove a reason for employers to treat workers less well.
Fast food workers need a break. Do you have any idea how many of them commit suicide every year? And it seems to me that there really are no market mechanisms that raise wages even in good times. Wages are raised by either government intervention or by the collective bargaining power of unions.
@Sheldon Richman
"Free-market economists have shown that raising the minimum wage may not always eliminate jobs."
This is true, and another way by which businesses can pay above-market wages is by charging above-market prices, which is possible because of all the barriers to entry that government places on their would-be competitors.
Moreover, I don't think it's difficult to see that complying with the minimum wage is easier for an already established firm than it is for a newly created one, which tells us that the minimum-wage itself also acts as a barrier to entry. These barriers to entry (some of which were lobbied for by unions themselves) favor established businesses, while harming both consumers, by depriving them of the better quality and lower prices that competition would bring, and workers, by depriving them of alternatives. Without alternatives, workers have no bargaining power, as you rightly point out, unless, of course, the government comes in once again and grants the unions also their own set of privileges.
It's just a vicious cycle of government intervention bringing about harm to society which then justifies even more government intervention.
@Pete
The market mechanism that raises wages is competition between employers. It's the same with everything : supply and demand. If government artificially lowers the demand for labor by forbidding some employers from entering the market, the wages will be lower.
Not only that, but government also closes off many paths of self-employment through licensing and regulation, which renders the vast majority of people captive in the hands of the established businesses.
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