Advocates of big government have a number of rejoinders to the argument made by free-market supporters that minimum-wage laws are a bad idea. They like to say, e.g., that a research study showed that raising the minimum wage doesn’t lead to unemployment.
How best to reply?
Economics professor Caleb Fuller of Grove City College gives a lot of good ideas in this Independent Institute article.
Fuller writes that “skilled economic communicators like Don Boudreaux, Robert Murphy, and Steven Landsburg, have been patiently dissecting every last argument for the minimum wage. They’ve been originating countless new thought experiments, analogies, and parables to convey the consequences of price floors. And in many cases, they’ve pointed out the flaws in empirical studies, but I haven’t seen a one-stop-shop where these problems are succinctly described.”
Among Fuller’s points are the existence of non-wage adjustments that employers make when government demands higher wages, that workers can become “underemployed,” and that employers can’t immediately adjust to higher wages, so studies done over short periods of time will be misleading.
If you want to be well-armed against those who say that minimum-wage laws don’t have adverse effects, read Fuller’s article.