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The Minimum Wage Debate

Kevin Delaney 12/12/1999

1. Government Set Wages

I feel safe making the following prediction:

During the 2000 presidential election, Bill Clinton will introduce legislation to raise the minimum wage. A barrage of Republican candidates will appear on TV spouting idiotic reasons not to raise it. Some will argue that raising the minimum wage will create inflation. Others will label it the "inner-city black unemployment act."

Regardless of the outcome of the debate, the legislation will achieve the desired goal of creating election year dissension. People will perceive that the Democrats are for broad based prosperity, while Republicans want force the working poor into abject poverty. This debate is guaranteed to turn several Congressional districts, and is more likely, than any other issue to win the presidency for the Democratic party.

The real question, however, is not the actual minimum wage rate, but the wisdom of having the governemt set wages. In most cases, a free market will produce superior results than government controlled markets. When the government sets wages, we create a negative situation where the livelihood of American citizens is politicized. The very fact that the minimum wage rate comes to the forefront of every national election is a very strong indictator that the government has been setting wages, and that the issue is already highly politicized.

Rather than debating the rate of the minimum wage. Republican candidates would do better to argue for the the replacement of the current minimum wage with a free floating index, and with other mechanisms to prevent the exploitation of workers.

 

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