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The Minimum Wage

  • Friedman’s video of 25 May 1996 in which he discusses and explains the driving force behind the counter-productive practice of minimum wage as follows:
    1. It reduces the number of people who receive a positive income from working.
    2. The higher minimum wage will lead to people being unemployed.
    3. The low wage people who are driven out of employment by rising minimum wage, do not produce what they could have otherwise produced.
    4. People who are employed at minimum wage today are mostly teenagers, secondary earners, people who are working part time. It is a very small fraction of the population who are employed at the low wage.
    5. Why do we have a minimum wage?
    1. The trade unions want to reduce the amounts of competition,
    2. We have minimum wage for the same reasons we have tariffs: It is an attempt to reduce competition.
    3. By using high sounding language, the trade unions get common people, who seem to be beneficiaries of minimum wage, who have the best intention to support the trade unions’ special interests.
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    The views expressed in the article are the author’s and are not necessarily shared by the members of the Foundation.

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