A Philip Dawdy piece in the Seattle Weekly repeats the social-service folks’ belief—a folk belief—that the problem of homelessness could be solved by an increase in the minimum wage. The article says:
Minimum-wage jobs pay $7.35 an hour. A 2001 study by the Washington Association of Churches pegged the self-sufficiency standard for rent, food, and transportation, etc., at $9.61 an hour for a single person in King County and at $11.76 per hour for each parent in a traditional four-person household.
If you look it up on the web, you’ll see that Washington has the highest minimum wage of any U.S. state. Here are the states that set a higher-than-required minimum:
All the rest of the states, including our neighbor, ID, are at the federal minimum of $5.15. (Twelve of the fourteen states on that list were Kerry states in the last election, by the way.)
Economic theory, and most of the evidence suggests that minimum wage laws tend to put people out of work—and not just any people, at random, but the least employable people. This is common sense: a law making it illegal to work for less than $7.35 cannot make your labor worth $7.35 to an employer. The higher the wage, the fussier the employer will be, and the less inclined to hire the formerly homeless.
The minimum wage is a starting wage, the first rung of the ladder. People who get on it, and are good workers, tend to rise quickly, studies show. But the higher you set it, the more people never get on the ladder.
There is a philosophical consideration as well. I believe that each person owns his labor. Whether he works, or doesn’t work, and the terms of his work, should be none of the government’s business. If he wants to sell his labor for less than $7.35, or $5.15, or ten cents, or give it away for free, or pay someone to take it, that should be his right. In fact, under the labor laws as I understand them, you cannot work for any wage between 1 cent and $7.34 per hour, but it’s OK to work for zero. I did that once, as a newspaper intern—and it was explained to me by the company that they could pay me zero but not, say, a dollar an hour. I wasn’t willing to work for zero for very long, but I was willing for a while—and it was my choice.
Respond to Bruce.