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02 May 2010 By
Jacob G. Hornberger An editorial in the Saturday New York Times
indirectly confirms what I wrote in my recent article
“Why Do Daily Kos and Alternet Support a Racist
Program?” In that article, I pointed out that a minimum-wage
law locks out of the labor market all those people
whose labor is valued by employers in the marketplace
at less than the mandated minimum. For example, if the minimum wage were set at $100
an hour, everyone could easily see the enormous damage
to workers that such a law would produce. Every worker
whose labor was valued at less than $100 per hour
would be immediately laid off. This principle, as I pointed out in my article, is
no different with respect to a $7.25-per-hour mandated
minimum wage. The number of workers locked out of the
labor market will obviously be less than if the
mandated minimum were $100. Nonetheless, those people
whose labor is valued in the marketplace at less than
$7.25 are laid off or never employed. As I pointed out
in my article, the ones who feel this unemployment
burden the most are inner-city black teenagers. Here is what the Times’ editorial states:
The problem of joblessness among teenagers is far
more severe in poor, minority communities. Those are
the places where violent, criminal street gangs
actively recruit disaffected teenagers. Teenage
joblessness has other long-term consequences; young
people who fail to find early jobs are more likely
to be unemployed or underemployed into their 20s and
permanently trapped at the margins of the economy.
Unfortunately, but not surprising given the depth
of economic ignorance among liberals (as I observed in
my article), the Times does not point to the
root cause of the problem: the minimum-wage law. In
order to resolve the teen unemployment problem, all
that would be needed would be a repeal of the
minimum-wage law. Then, those teenagers whose labor is
valued at less than the mandated minimum would be free
to compete for jobs in the marketplace at less than
the mandated minimum. Instead, the Times takes the standard
liberal approach — pile one intervention on top of
another intervention. The paper is calling on Congress
to approve hundreds of millions of dollars for a jobs
program. The Times correctly observes that
“bills like these are often portrayed as pork barrel
spending” but the Times justifies such spending
because, it says, “summer jobs help young people in
desolate communities find meaning in their lives while
improving their long-term work possibilities.” The Times gets it both right and wrong,
however. While summer jobs do in fact bring meaning to
young people’s lives and help them to learn job skills
while earning a bit of money, this principle applies
only in the free market, where they are freely
competing for the jobs they want. An artificial jobs
program induced by government’s taxing and spending is
nothing more than a boring, meaningless, dead-end
dole-distribution system that provides nothing of
long-term value to young people. There is one — and only one — just, moral, and
pragmatic solution to the problem of teenage
unemployment, especially for blacks in the inner city:
Repeal the minimum wage. Jacob Hornberger is founder and president of The
Future of Freedom Foundation. |