My video lecture, part of the Business Ethics Cases series.
Contents:
1. The standard employer/employee relationship.
2. The argument for minimum wages.
3. Contrasting the initial arguments’ claims about economics, ethics, and politics.
4. The economic argument against minimum wages.
5. Minimum wages: ethics and politics.
The entire video (53 minutes total):
Supplements:
Linda Gorman, “Minimum Wages” (at the Concise Encyclopedia of Economics).
Summary flowchart of arguments for and against minimum wages [jpeg] [pdf].
European country data on the minimum wage.
Table: Unemployment and Minimum Wages in Europe, 2013.
Go to the Business Ethics Cases series. Full playlists at YouTube.
Go to the Philosophy of Education lecture series.
Go to the StephenHicks.org main page.
Excellent presentation, Dr. Hicks. Thank you so much for making it available!
Thank you. This website is a goldmine.
Thanks a lot for this clear and informative presentation. What I did miss, however, was an argument in favor of a minimum wage which I would have thought was somehow basic, namely that every full job should provide for a living. Minimum wage in Slovenia, for example, is currently set at around 600 Euros, which is just below the official poverty line. Are those who, in their self-serving blindness to the facts of real life, believe in the philosophical and legal fiction of free, self-responsible agents who, in their capacity as sellers and purchasers of labor, ‘voluntarily’ enter mutually beneficial agreements, actually suggesting that people who are unfortunate enough to only qualify for lowest-paid jobs, should do two or even three jobs at a time for a living (like they do in the States)?
Hi Friderik: Thanks for your comment. The argument you suggest is a variant on the main argument presented in section 2. Advocates of minimum wages differ about how minimal or generous the mandated level should be.
“The whole aim of practical politics,” observed H. L. Mencken, “is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins…”
We must remember that the alternative to a free market is a state controlled one: a so-called “command economy” where the economic choices of a free creative citizenry are replaced, in part or full, by the coercive decrees of government officials gifted with a disinterested and superior insight into what is best for them.
Welfare statism and interventionism i.e. partial socialism are predicated (to that extent) on socialism’s central doctrine: liberty has failed, compulsion is required.
Statists argue that the rule of law provides insufficient legal oversight of the economy and that only a policy of massive, sustained and theoretically unlimited interventionism i.e. the rejection of liberty can produce a healthy economic climate.
History, particularly the history of 20th century socialist practice, does not bear this out.
:Minimum wage should not nescesarily be abolished, but it should at least be lowered and most definitely not go up any further than it is now. When companies have to pay their workers a set amount of money, they have to set their product to a higher cost in order to remain functioning, to pay their workers, and to make profit of any kind. In order for consumers to be able to even afford the products offered by these companies, minimum wage needs to be lowered so that companies can afford to lower the price of their products.This is a good point. As minimum wage goes up, so do prices. Therefore, increases salary will just be absorbed by increased prices. The employee would not be in a better financial position.