HR Strange But True!
January 04, 2007

As Democrats prepare to propose legislation that would raise the minimum wage, columnist George F. Will is arguing that the federal minimum wage should be abolished.

In his January 4 column, Will writes that market forces should determine wages instead of the federal government.

"The minimum wage should be the same everywhere: $0. Labor is a commodity; governments make messes when they decree commodities' prices," Will writes. "Washington, which has its hands full delivering the mail and defending the shores, should let the market do well what Washington does poorly. But that is a good idea whose time will never come again."

Kevin Drum, on his blog at the Washington Monthly, says Will is wrong for two reasons.

"First, as a matter of empirical economics, workers aren't commodities," Drum writes. "Unlike pig iron ingots, they respond to incentives, they can be trained to operate more efficiently, they put their paychecks back into circulation, etc. As Will is undoubtedly aware, there's an entire branch of economics dedicated to exactly these issues, and it reaches conclusions considerably more complicated than those in the Micro 101 class he took half a century ago. Second, he's mistaken in a moral sense. A rich society really has no excuse for not setting bare minimum levels of decency for all human interactions, including those between employer and employee."

Will also claims one of the byproducts of raising the minimum wage would be higher high school dropout rates.

"Raising the minimum wage predictably makes work more attractive relative to school for some teenagers and raises the dropout rate," Will writes. "Two scholars report that in states that allow people to leave school before 18, a 10 percent increase in the state minimum wage caused teenage school enrollment to drop 2 percent."

The last increase to the federal minimum wage occurred in 1997, when it rose to $5.15. Twenty-nine states have approved minimum wages above $5.15 per hour. Ten of those states have tied future minimum-wage changes to inflation.

President Bush has said he would support increasing the federal minimum wage to $7.25 per hour over a two-year period, as long as Congress also approves new tax and regulatory breaks for small businesses.

Sources: Washington Post and Washington Monthly

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