J. Kieffer: Lower pay for inexperienced workers

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When something becomes more expensive, people buy less of it and/or find substitutes.

When the price of gas goes up, what do we do? We find ways to use less by driving less or getting a more efficient vehicle.

When the price of heating oil goes up, what do we do? We find ways to use less by lowering the temperature, insulating, or maybe buying a pellet stove.

Sometimes people raise the price of things to encourage less consumption. Everyone accepts that raising taxes on tobacco will give some people an incentive to quit.

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This same law applies to low-skilled labor. When you raise the price of it by increasing the minimum wage, employers will hire fewer young and inexperienced workers. Employers may automate, combine responsibilities, or just eliminate positions.

There’s nothing magical about minimum wage legislation. It doesn’t negate that basic law of human behavior where people buy less of something when it becomes more expensive, nor does it force employers to pay people more than they can produce.

Minimum wage takes away the opportunity for many young and inexperienced people to get a job. If you can’t get hired without experience, and you can’t get experience without a job, what are you to do?

As counter-intuitive as it may seem, the best way to help the poor is to allow employers to pay them a pittance. That gives the poor an opportunity to gain experience, and then earn themselves a living wage.

John Kieffer, Turner

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