Minimum wage laws are horrible. Low-skilled workers are thrown out of work if they cannot produce more than the minimum wage stipulates. If the minimum wage is $15/hour and a worker can only produce $13/hour worth of goods, they will not be hired since no profit-seeking employer would employ someone at a loss.
Compulsory unemployment: Rothbard’s take on minimum wage laws
American economist and philosopher Murray Rothbard gave a blunt rebuttal of minimum wage laws:
- “In truth, there is only one way to regard a minimum wage law: it is compulsory unemployment, period. The law says: it is illegal, and therefore criminal, for anyone to hire anyone else below the level of X dollars an hour. This means, plainly and simply, that a large number of free and voluntary wage contracts are now outlawed and hence that there will be a large amount of unemployment”
Beyond the horrific material burden which minimum wage laws places on low-skilled workers, it also denies them their autonomy. We think that we have the right to use our body how we want, without the state telling us otherwise. We may use our voice to speak our minds, our hands to worship God in the way we see fit, and our bodies for consensual sex with whom we please. Why then, is this liberty not extended to the use of our bodies in the market? Why should people not be free to exchange their labor for the price they see fit? Rothbard notes the peculiarity of this modern liberal/progressive position:
- “[L]iberals are supposed to be in favor of any voluntary actions performed, as the famous cliché goes, by “two consenting adults.” Yet it is peculiar that while liberals are in favor of any sexual activity engaged in by two consenting adults, when these consenting adults engage in trade or exchange, the liberals step in to harass, cripple, restrict, or prohibit that trade. And yet both the consenting sexual activity and the trade are similar expressions of liberty in action.”
What minimum wage laws mean for low-skilled workers
The free exchange of labor is effectively denied by minimum wage laws. Minimum wage laws not only dictate to employers the price at which they must buy labor, but also tells the worker the price at which they must sell their labor. If the worker cannot find a buyer of their labor above the minimum wage, they cannot sell it at all.
Thus, what many of us take for granted, the right to sell our labor for the price which others are willing to pay, is denied to low-skilled workers. They are essentially told, “You are not good enough to earn a wage. You, because of your low productivity, may not sell your labor on the market as the rest of us do every day.”
Instead, low-skilled workers are forced to endure unemployment. They must subsist on handouts either from the government or the charity of others. And it is not because they are unwilling or unable to work. It is because they were denied the right to work by the state. It is because the state has decided that they are not good enough, not productive enough to have the right to earn a wage.
Raise the Wage Act: denying people the right to work
Biden’s proposed Raise the Wage Act would more than double the federal minimum wage from $7.25/hour to $15/hour, consequently increasing the number of people who are denied the right to work. The level of productivity which workers must meet in order to be employed is increased and more people will fall under the category of not-productive-enough-to-work.
The Congressional Budget Office admits that if the Act is enacted, “[e]mployment would be reduced by 1.4 million workers.” This means that 1.4 million people would be denied the autonomy to earn a wage because they cannot produce enough to remain employed at $15/hour.
If we really believe that people should be at liberty to use their bodies as they see fit, then that liberty ought to be extended into the marketplace. People ought to be free to form their own labor contracts.
We must afford people – all people – the autonomy to work. Thus, opposing Biden’s proposed increase to the minimum wage is not enough, and even lowering the current minimum wage is not enough. No worker should be considered unskilled enough to be denied the right to earn a wage from their labor. The minimum wage should therefore be abolished.
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This article was originally published on the Students For Liberty website in March 2021.
This piece solely expresses the opinion of the author and not necessarily the organization as a whole. Students For Liberty is committed to facilitating a broad dialogue for liberty, representing a variety of opinions.