Responding to a particular argument on the minimum wage

posted by
March 17, 2013
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by Robert P. Murphy  
Posted in Commentary

"You’ve got two guys who get laid off from a factory in Detroit. They both had identical jobs paying $40,000, and would like to get a comparable job. But there’s nothing like that available, so they have to settle for jobs they think are beneath them, like becoming a janitor or working at Wendy’s. The only difference is, one guy has $20,000 in savings in the bank, while the other guy has $200 in savings. Which guy is going to buckle first, and take the menial job? Which guy is going to hold out longer, looking for a job more similar to what he’s used to? It’s the same logic with government support programs. They allow poor people to survive without earning labor income." (03/15/13)  

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