My letter to the NY Times re: Increasing the Minimum Wage Will Increase Unemployment

Re: Dollars on the Margin by Matthew Desmond
Dears Sirs:
Has Mr. Desmond, author of “Dollars on the Margin”, never heard of the “Marginal Productivity of Labor”? How about the “Laws of Supply and Demand”? No? Well, let me explain. If the productivity of one’s labor is less than the government’s arbitrarily mandated wage that businesses must pay for that labor, unemployment will result. Otherwise, capital will be consumed until the business goes bankrupt. If a price control, such as a minimum wage, is set at too high a level, demand for labor will fall and unemployment will rise. I am surprised that the supposedly knowledgeable editors at the New York Times printed an article that extols the benefits to raising the minimum wage without at least pointing out the probability of these outcomes. Sure, if one is lucky enough to keep one’s job, one lives a better life, as illustrated by the minimum wage workers that Mr. Desmond found. But Mr. Desmond failed to find two groups of minimum wage workers–those who lost their jobs due to the increase in the minimum wage and those who never got jobs in the first place.
Patrick Barron
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