Tuesday, May 4, 2010

An Entrepreneur and the Minimum-Wage

by Don Boudreaux on April 29, 2010

A.G. (who asks me to use, in this post, only his initials) is a regular reader of Cafe Hayek. He’s 28 years old and is an entrepreneur in Charlotte, North Carolina. His firm employs 25 people, 21 of whom are low-skilled workers. A.G. just sent this memo to his employees:

To All Team Members:

The schedule for next week has been posted. You may notice that hours have been cut back on your schedule. This is across the board, not just you. I don’t want anyone to think they’ve done something wrong to deserve a cut in hours, so I wanted to explain why it’s happening.

There are a couple of reasons for this:

Go here and read the whole thing.


  1. Well, I guess I'm going to continue to be at odds with the general sentiments here.

    I know all the arguments about entry-level employees, and teenagers getting their start, but I just can't see that if a job is not worth more than what the minimum wage is, even with the latest round of increases (though I would say it's gotten closer to the low end of what I would consider a job should be worth in this country), then it's not really producing a product or service that is worth the effort.

  2. Wayne, it isn't for you to decide that (except by choosing not to buy such products/services). It's for the people who are willing to work for less than minimum wage, but are prevented by law from doing so.

    Now go tell handicapped adults, many of whom simply don't function well enough to produce at a level that justifies paying them minimum wage, that they're better off in glorified day-care centers than earning a few dollars an hour doing something productive.

    Go tell the kid from the inner city whose education leaves him barely literate that he's not allowed to offer his services at a reduced rate in exchange for a chance to get some experience and training that will make him more valuable in a few months or even years (during which time whatever he produces is offset by the time the experienced workers must take to train him). Tell him that he might as well go sling rock and die young in a drive-by, since you don't think it's "worth the effort" for an experienced craftsman to take him under his wing as an apprentice. No, if you're not able to get into a good school and earn a degree that makes you look good on your resume, you should just go away.


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