What would happen if minimum wage laws were abolished?

An interview with free market economist, Gerard Jackson, on: What would be the effect of completely abolishing minimum wage laws?

The idea of a government mandated minimum wage is deeply entrenched in Australia, the United States, and across the West.

In 1933, American President, Franklin D Roosevelt said

… no business which depends for existence on paying less than living wages to its workers has any right to continue in this country.

But Gerard Jackson argues that an “effective minimum wage” (one that is higher than what a free market would deliver) is a key factor in creating unemployment.

Topics covered during this interview include:

Even The Howard Government’s Workchoice laws preserve a minimum wage. The wage rate being discussed includes money in the pay packet AND all other conditions and benefits such as holidays, conditions, etc. What is meant by the “effective minimum wage”. Politicians as economic illiterates.

The discredited methodology of the David Card & Alan Krueger report that claimed increasing minimum wages does not necessarily cause unemployment. Why do workers and employers have different “rights”? The role of capital structure – the material means of production – in determining real wage rates. Adam Smith’s confusion on this issue.

And much more!

For further comments regarding the way unions wrongly rely on the Card-Krueger study, read Gerard Jackson’s essays here and here.

Leave a Reply