November 11, 2009
Minimum Wage: Testify!

An interesting article from a prospective economist. This young woman, now a senior in college, had a summer job at a bakery.

And, she recently listened to the podcast Russ Roberts and I did on vaccines, minimum wages, and shortages. And here's what she had to say. Amazing stuff.

Today I was listening to the Econtalk episode on prices from October 19th I was surprised at your discussion of the minimum wage. Recently(this past year), I was employed at a local bakery and experienced this coercive power first hand. In my particular position, the employer I was working under seemed fairly reasonable until spring 2009 when unemployment numbers dramatically increased and sales decreased. At that point, my employer was unable to lower wages and instead, demanded more of his employees which dramatically decreased working conditions.
Before the spring, we (the employees) were only responsible for making delicious coffee drinks, and serving customers with as much care as possible. But gradually we were required to preform additional tasks that included: scrubbing the bathrooms, cleaning the kitchens, and other chores that were not originally part of our position. In addition to the added unpleasant tasks, our employer worsened the entire environment by failing to wash our uniforms, shortening our break time, limiting our hours and daily threaten us with the many applications he had received for our jobs. Eventually the company began to fire individuals for trivial reasons. The colleagues that I had worked with for a year began to disappear. Eventually, after three rounds of firing I lost my job as well. Since then, I have been contemplating the minimum wage and the coecive power it gives to employers. I found this problem so interesting that I even used it in my graduate admissions essay, (which I included if you are interested).
I was so delighted when I heard your discussion on econtalk because I am interested in economic research on the subject, but most economists fail to recognize the coercive side of minimum wage.

Yes. Yes, they do. What a terrific young woman. I wish her the best.

Posted by Michael Munger at 09:10 PM in Economics

The statesman who should attempt to direct private people in what manner they ought to employ their capitals would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it. -Adam Smith

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