Destroying Jobs with Innumerate Compassion

Townhall.com ^ | March 16, 2015 | Daniel J. Mitchell

[Kaslin]

A few days ago, we used supply-and-demand curves to illustrate how taxes reduce economic output.

Supply-and-demand curves also can be used to examine the impact of minimum wage laws on the labor market.

Workers understandably will be willing to supply more labor at higher wages.

Employers are just the opposite. They demand more labor when wages are low.

In an unfettered market, the interplay of supply and demand will result in an “equilibrium wage.”

But as you can see from the chart, if politicians impose a minimum-wage mandate above the equilibrium level, there will be unemployment.

Some folks, though, may not be overly impressed by theory. So how about empirical research.

Other folks, though, may prefer real-world examples rather than academic studies.

We’ve already looked at the bad results when the minimum wage was increased in Michigan.

Now we have some more unfortunate evidence from the state of Washington. Seattle Magazine has a story about a bunch of restaurants closing because of an increase in the minimum wage.

The article starts by noting a bunch of eateries are being shut down.

Last month—and particularly last week— Seattle foodies were downcast as the blows kept coming:Queen Anne’s Grubclosed February 15. Pioneer Square’sLittle Uncleshut down February 25. Shanik’s Meeru Dhalwala announced that it will close March 21.Renée Erickson’s Boat Street Café will shutter May 30… What the #*%&$* is going on?

Hmmm…so what’s changed. It’s not higher food prices. It’s not a change in dining preferences of consumers.

Instead, government intervention is having a predictable effect.

[DoodleDawg]

In an unfettered market, the interplay of supply and demand will result in an “equilibrium wage.”

And when has a market ever been "unfettered"?

[Boogieman]

Back when Cain traded Abel a few loaves of wheat bread for a lambchop?

[zeestephen]

Re: “In an unfettered market, the interplay of supply and demand will result in an “equilibrium wage.”

Unfettered, or not, every market will find an equilibrium wage.

Because of massive immigration, both legal and legal, there is a massive oversupply of low skill labor in America.

The result is obvious - their wages, benefits, and working conditions have declined or stagnated for the last 25 years.

And, because of hundreds of thousands of foreign work visas, USA wages for software engineers and related professions have stagnated for 15 years.

Minimum wage or massive LEGAL immigration?

What difference does it make?

One destroys jobs, the other guarantees poverty or low wages for millions of American-born citizens.