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One adverse consequence of raising the minimum wage that is not mentioned in Brandon Crocker's fine article is the labor substitution effect. Raise the minimum wage, and you draw in senior citizens looking for a way to get out of the house and stay part of a team. As an employer, you now have your choice between hiring a senior citizen with a 40 year history of responsibility, versus a teenage high school drop out. No brainer, right? Oh, and by the way, raising the minimum wage also increases the high school drop out rate. So now you have coaxed more teens, most specifically more black male teens, into a workforce where they bring few skills, and you make them compete against old people. Net effect: greater unemployment among black teen age males. It's been documented -- google it and you'll find plenty of studies.

Oh, and did I fail to mention that many government union contracts specify hourly wages that are a multiple of the prevailing federal minimum wage? It will help the union members to be able to move out of those neighborhoods that experience an increase in the population of male high school drop-outs.

So let's do something constructive -- get high school dropouts to organize politically to protect their own interests and vote against Kerry! Calling Al Sharpton. Al, are you with us? Jesse? Anyone? Bueller?
-- John Hatch, Ph.D. (economics)
Arlington, Virginia

Further to Brandon Crocker's "Minimum Wage Myths," I see the nut of the matter in simpler terms. The most important factors are:

(a) These are entry level jobs where young or under-educated people can begin in the job market to obtain experience and build a good work record.

(b) Increasing the minimum wage will absolutely drive many small businesses out of the market place, taking their entry level and other jobs with them (increasing the minimum wage from $5.50 to $7.00 an hour is an increase of over 27%, a huge increased expense for any business, even if it's over a 3 year period).

(c) Inflation -- a cruel tax on everyone, including minimum wage earners -- will be stimulated not only because the increased minimum wage costs must be passed along to consumers but, also, co-workers earning more than the minimum wage will fairly expect an increase in their wages, again to be passed on to the consumer. And, naturally, labor unions will quickly begin efforts toward concomitant raises for their members, which, again, must be passed to consumers. For unions, a 27% raise for lowest wage earners would be a robust starting point to begin their new negotiations; and

(d) In any case, as a percentage of workers in this country, very few rely on minimum wage jobs as a long-term source of support for themselves and their families. They quickly move up, or on, when they demonstrate a good work record.

The bottom line problem, of course, is artificial influence being placed on our whole system of commerce affecting hiring, producing, pricing, marketing, distributing, and consuming goods and services. This perverts the entire market place, and John Kerry's flip comment that past increases in the minimum wage "never" have resulted in fewer jobs or increased prices illustrates either his ignorance, his refusal to believe his lying eyes, or his steadfast adherence to a long-standing concept used so well by liberals: lying through his teeth.
-- A. A. Reynolds
Chula Vista, California

Thank you for your excellent article on the myths of the minimum wage. However, I must point out one rather glaring error of basic economics:

"The common sense notion that if you increase the price of something, all other things being equal, you will decrease the demand for that something, has been demonstrated..."

This statement is the single surest sign of someone who wasn't paying attention in their college econ class. An increase in price does not decrease demand. Instead, it decreases the quantity demanded (all other things, etc. etc., of course).

Otherwise, an excellent article!
-- Sean Parnell
B.A. Economics, Drake University, 1996

TO THE RESCUE
Re: John Tabin's Ryan Express Ways and Terence McMahon's letter ("Not in the Mood") in Reader Mail's Who Goes There?:

It is not my task here to defend Mr. Tabin or his article. First the statement by Mr. McMahon that "anyone with half a brain" knows the difference between a real person and a character in a Clancy novel is an expression of opinion NOT fact. The examples of folks in today's society that obviously do NOT appreciate the difference between fiction and reality are too numerous to need any serious citations.

Finally, if this "lame attempt at humor" is all that it takes to get Mr. McMahon's panties all in a wad, he must live in some kind of Camelot where serious problems and errors simply do not exist. In other words, get a life Mr. McMahon and save your righteous indignation for something at least mildly serious. Take another Prozac and chill out.
-- Ken Shreve
New Hampshire

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