The Minimum Wage is Zero

Given the current debate about raising the minimum wage, it’s worth considering the wage’s implications. After all, as Thomas Sowell is fond of saying, whatever the statutory minimum wage, the real minimum wage will always be zero. Employers, in other words, always have the option of not hiring at all.

Anyway, a related trivia question. Name (at least) two developed countries that currently have no legal minimum wage. For bonus points, cite their current unemployment rate.

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Comments

  1. Matt Stoller says:

    After all, as Thomas Sowell is fond of saying, whatever the statutory minimum wage, the real minimum wage will always be zero. Employers, in other words, always have the option of not hiring at all.
    Well that’s not a wage, because a wage implies employment. Kind of pedantic and silly, but then, so is the argument that minimum wages are problematic.

  2. Paul K says:

    True enough. A wage, strictly speaking, implies gainful employment, but you’re being a little over-literal, me-thinks. The merit, such as it is, in Sowell’s comment is in reminding ourselves that employers have options, whatever lovely stipulations we might put in place regarding wages.
    By the way, do you really think that arguments about the efficacy of minimum wages are “silly”? I beg to differ. Despite the issue coming up every few years like clock-work, people on both sides persist in talking past one another on this important issue.
    Consider the New Jersey studies (David Card and Alan Krueger (1994)), the rejoinder (David Neumark and William Wascher (1995)), and subsequent work by Michl (1999). Far from being a silly issue, or a dead one, it is alive with interesting analysis, most of which, sadly, never makes it into the never-ending sterile debates.

  3. LeroyB3 says:

    Is it a coincidence that the states with the highest unempoyment also have the highest minimum wage?

  4. Ryan Stevenson says:

    hi, my name is Ryan Stevenson and i am currently working a public policy paper for Humanities at my school (Poland Regional High School. Anmy information you could give about the minimum wage and the effect it has on teens and Americas work force would greatly be appreciated.