Unjust Justice

Rev. William Barber has a post over at In These Times about The Fight for a $15 Minimum Wage Is a Fight for Racial Justice. He quotes a loose translation of the beginning of the 10th chapter of Isaiah in support of his argument—

Woe unto those who legislate evil and rob the poor of their rights, who make women and children their prey.

I agree with Rev. Barber that those of us who are better off have an obligation to treat the poor justly and to compassionately care for widows and the fatherless. However, I believe the minimum wage increase he supports will hurt rather than help the poor. Indeed, passing such a law will be legislating an evil.

The general effect of increasing the minimum wage is to price workers with marginal skills out of the labor market. Businesses don’t have bottomless funds from which they pay wages. They can only extract so much revenue from their customers, and that money must be divided among paying for inventory, rent, wages, and other expenses. A minimum wage bill doesn’t make expenses like rent disappear, so a business only has so much it can divide among its workers for payroll. When the law artificially increases each worker’s pay, simple arithmetic shows that fewer workers can be paid before the money is gone. Business that survive will keep their best employees and fire marginal workers. Business that grow will hire fewer workers.

Not every worker who loses his job because of a minimum wage increase will remain unemployed. Some will find work off-the-books in the informal economy, but increasing the minimum wage invariably increase unemployment among our poorest citizens.

We Americans generally believe that everyone has a right to work to support himself and family. Is it just to pass a law artificially pricing poor workers out of the labor market? I don’t think so.