Boxer claims that a mandated increase in the price of your labor will benefit you, the seller. If that is true, than a mandated increase in the price of hamburgers should benefit McDonald’s, the seller, right? But there is nothing to stop McDonald’s from raising their prices. If $10 an hour is a good price for labor, why do they not charge $10 for a hamburger? The answer should be clear. At $10 a burger, McDonald’s would have many, many fewer customers. Even if every food product on the market fell under the same requirement so that customers couldn’t substitute to another eatery, people would still eat less in general, and McDonald’s would lose money. An arbitrary hike in the price of a product does not benefit sellers, it drives away buyers. Labor is no different than any other product in this regard.
When we think of labor as a product in this way, discarding abstract and meaningless notions of what is a “fair” wage, it becomes quite easy to see why high minimum wages do not benefit the poor. The price of labor rises, and so people buy less of it. Unemployment rises, and people with jobs find themselves either laid off or forced to work fewer hours in order to reduce costs. Since there will be fewer jobs available at the new minimum wage, production will decrease across the entire economy. Lower production levels mean that consumers must compete more aggressively for available goods by bidding up prices. So even though the workers lucky enough to keep their jobs may see an increase in pay, their dollars will not stretch as far as before.
According to Boxer, “There’s one word we always have to focus on and that’s ‘fairness’.” Leaving aside what a stupid thing that is to say, let’s take her at her word and focus on fairness. Is it fair to the man working for $8 an hour to be put out of work, because the government rules this productive contract illegal? Is it fair to young, uneducated workers trying to gain experience to be forbidden from competing across the only dimension they are able? Is it fair to mandate higher wages for a few, privileged workers while the same legislation throws many others into joblessness? Is it fair to saddle businesses with higher costs in a weak economy with an already draconian regulatory environment?
