Minimum wage nullifies the economic ladder


Trout Run

Most low-wage jobs are initial.

And there would be many more such jobs if they were not prevented by minimum wage legislation. Such jobs are often entry points into the world of work. As people accumulate the skills that are required for successful employment, they typically move on to higher-paying jobs.

If entry-level jobs are foreclosed, however, an opportunity for the creation of skills and traits is also foreclosed. Without the opportunities for personal development that are provided by such entry-level jobs as working at fast food restaurants, the chance or the opportunity to move into higher paying jobs is diminished. Work experiences contribute to a person’s human capital and thereby increase earnings. In the absence of the experience afforded by entry-level employment that might pay less than the minimum wage, less human capital will be accumulated, which in turn will lead to lower lifetime earnings. Advocates of minimum wage — in addition to stubbornly refusing to recognize that raising employers’ costs of using the input called “low-skilled labor” incites employers to use less of this particular input – also ignore the damage that this policy has on the human capital and lifetime earnings of workers whose entry into the labor force is either delayed or altogether blocked.

Far from helping to reduce poverty and income inequality, I believe minimum-wage legislation perpetuates poverty and inequality. And this is how Democrats hold on to their voting base.