Imagine that you stop at a red light and see a man with a cardboard sign that reads: “Jobless and hungry. Please help.” You could hand him a five-dollar bill, but you don’t. That decision may be morally wrong, but it’s not illegal.
Now suppose the driver behind you offers the man $5 if he’ll spend an hour mowing her lawn. The man judges that he is better off mowing the lawn and getting the $5 than not mowing the lawn and not getting the $5. So he agrees.
The man would be working for less than the federal minimum wage of $7.25/hour. However, he prefers to work for less than the minimum wage rather than to not work at all.
Now, if you are within your legal rights to offer him nothing, why isn’t the driver behind you within her legal rights to offer him something that’s better than nothing?
This “non-worseness” claim, as Matt Zwolinski and Alan Wertheimer put it, denies that “a mutually advantageous (but unfair) interaction can be morally worse than no-interaction at all.” Zwolinski elaborates:
If exploiters like sweatshops are doing something to make the lives of the poor better, while most of us are doing nothing, then how bad can exploitation really be? We vilify sweatshops, price gougers, and payday loan operators for exploiting the vulnerable. But we give ourselves a pass on our own neglect of those same vulnerable people, even though exploitation is often better for the vulnerable than neglect.
Even if you think that the driver who offers the man a job is doing something wrong by making an unfair offer, it’s hard to see why it’s worse than offering nothing. And since it is not illegal to offer nothing (although I’d argue that it is morally wrong to offer nothing), it’s hard to see why it should be illegal to offer something that is better than nothing.

Freedom of Contract

One common defense of the minimum wage goes something like this. People in poverty have few, if any, good options for work. Employers have an incentive to exploit the poor’s lack of options and offer them very low wages, as some might argue the driver who offered $5 for lawn mowing services did. Because the poor have no reasonable alternative to this offer, they are, in effect, forced to take it.
I think that there is a meaningful sense in which the poor are forced to take bad jobs. Still, it could be the case that the state shouldn’t prevent them from taking those bad jobs.
To see why, consider an analogy from philosopher Robert Nozick. Suppose there are 56 people who agree on a ranking of the desirability of each group member as a marriage partner. The most desirable partners pair off, until only two people remain single. Each of these two people regards the other as the least desirable partner. However, they decide that getting hitched to each other is better than staying single.
Few would say that the state should block this marriage arrangement. Although the last two people choose a bad option, each believes it’s better than the alternative. Taking away the option doesn’t do them any good. Similarly, as Nozick’s argument suggests, the state should not block people from accepting bad work arrangements that are nevertheless better than the alternatives.
Of course, to say that the state shouldn’t interfere with these sorts of offers is not to say that it should do nothing to address poverty and exploitation. It’s just that removing an option for the poor is a bad policy if the problem is that the poor lack options. A better idea is to give them more options. (More on this point in a minute.)

Occupational Choice

All liberal political philosophers uphold citizens’ freedom of occupational choice: the state may not dictate how you employ your labor. Freedom of occupational choice is another consideration that speaks against the minimum wage.
Consider Jeff, who is out of work. Having struck out on the job market, he decides to take matters into his own hands. He buys some yarn and two knitting needles to create scarves to sell at a local flea market. He nets $40 per eight-hour workday, which comes to $5 an hour.
Although he earns less than the minimum wage, surely Jeff has the right to choose to allocate his labor in this way. This conclusion follows from the right of occupational choice — Jeff, not the state, gets to make the call about how Jeff occupies himself.
Why, then, should things be different if Jeff decides to knit at a scarf factory for a wage of $5 an hour? In his discussion of the proposal to raise the minimum wage to $15 per hour, Bas van der Vossen puts the point thusly:
People can apparently work for themselves for, say, $8 an hour, without an injustice being done. They just can’t work for someone else for the same price. Or, to put it the other way around, people can employ themselves for $8 an hour, they just can’t employ anyone else at the same rate.… The worry here is a general one. Why would it ever be okay for people to offer a benefit to themselves but not to others?
From the perspective of a prospective employee like Jeff, the question is this: if I may accept $5 per hour in conditions where I employ myself, why may I not accept $5 per hour in conditions where others employ me?

A Better Solution

I don’t think the minimum wage is a good idea, but that doesn’t mean I think we should be complacent about poverty and exploitation. For instance, following philosopher John Rawls, we can simply transfer cash directly to the poor rather than mandating a minimum wage. If the problem is that the poor have too few options, it’s a bad “solution” to remove one of those options. We wouldn’t stop Juan from offering Francine a snack just because Francine needs a full meal. But that’s precisely what the minimum wage does.