I have written a guest blog post for Modeled Behavior at Forbes.com explaining why conservatives should oppose the minimum wage. I responded to Adam Ozimek’s provocative post which argues that conservatives should support minimum wage mandates.
Adam’s original post had an important insight: the minimum wage prohibits employment of individuals whose productivity is deemed too low. He also noted that imposing a higher minimum wage would encourage people to work harder, which may also be true. Throwing people overboard at sea will get them to focus on their swimming, but that doesn’t make it a good policy.
My argument against the minimum wage centered on the idea that unskilled and inexperienced workers must pay for their own general training through lower wages. Employers won’t pay for general training because labor turnover is too high, which prevents employers from obtaining a return on an investment in such training. Higher minimum wages eliminate job opportunities at the bottom rungs of the economic ladder. These jobs, with low pay, are an important way for inexperienced workers to acquire labor market experience and general skills.