The laws of economics, much like gravity, are not subject to a vote. Nor do they change based upon popular opinion.
Unfortunately, the sponsors of HB 1046, Constitutional Amendment [to] Up the Minimum Wage, need to be reminded of this.
Reps. Carla Cunningham (D-Mecklenburg), Graig Meyer (D-Orange), Bobbie Richardson (D-Nash) and Jean Farmer-Butterfield (D-Wilson) sponsored this bill that would place on the ballot this fall a constitutional amendment to change the state constitution to include a $9 an hour statewide minimum wage. Moreover, this minimum wage would increase automatically every year at a rate equal to annual inflation.
Minimum wage laws not only have no place in a free society and hurt the very people they are supposedly set up to help, they also have a very ugly history.
Minimum wage laws are an infringement on freedom. In a free society, people would have a right to engage in work arrangements free from government coercion and threats. The minimum wage, however, criminalizes voluntary agreements between employer and employee if the agreed-upon wage happens to be below the amount arbitrarily chosen by the political class.
Furthermore, basic supply and demand tells us that the higher the price of a good, the less of that good will be demanded, other things being equal. In this case, if the “price” of low-skilled labor (i.e. wages) is artificially raised, there will be fewer willing buyers of low-skilled workers (employers). The result: higher unemployment among low-skilled workers.
Empirical studies are not needed to confirm this, nor can they refute this. It is simply logic. No amount of wishful thinking or government fiats will change it.
Lastly, consider the ugly history of the minimum wage. This Foundation for Economic Education article points to academic literature that highlights how early minimum wage advocacy was tied in with the racist eugenics movement.
These days, you can count on media talking heads and countless politicians to proclaim how wonderful the minimum wage is for the poor. Wage floors will improve the standard of living, they say. But back in 1912, they knew better — minimum wages exclude workers — and they favored them precisely because such wage floors drive people out of the job market. People without jobs cannot prosper and are thereby discouraged from reproducing. Minimum wages were designed specifically to purify the demographic landscape of racial inferiors and to keep women at the margins of society. (emphasis added)
Economist Thomas Sowell also points out how the minimum wage has been used to keep minorities and immigrants from accessing jobs in several nations across the world for generations. Such a sordid history has lead economist Walter Williams to label the minimum wage as “one of the most effective tools in the arsenal of racists everywhere in the world.”
Because minimum wage laws criminalize peaceful, voluntary labor agreements, ultimately hurt low-skilled people the most, and have an ugly history rooted in racism, HB 1046 is this week’s Bad Bill of the Week.