The following is a letter that I submitted to the Cleveland Plain Dealer. I once again went after Christopher Edley, who proposed increased wages as a means of bringing about economic recovery:
Christopher Edley’s main argument for increased wages as an antidote for unemployment (“The Economic Power of Obama’s Pen,” July 12) exposes a gap in basic economic understanding and a more pervasive fallacy in conventional economic wisdom. With each new increase in minimum wage, more unskilled workers are thrown onto the streets. Initially, the harmful effects of minimum wage were confined to teenagers, but now, market-defiant wage inflation threatens the breadwinners of already impoverished families. The lowest class of society is impacted most severely in the form of decreased hours or layoffs when government sets wages above market rates. If raising the minimum wage stimulated economic growth, it would make sense to set wages at $20, but at some point, employers are unable to meet payroll. Furthermore, as the economy continues to recede, massive levels of unemployment will force wages down, irrespective of government attempts to inflate wages. While the intentions of minimum wage supporters are noble, the interests of the poor would be better served with free-market solutions. Government will only increase unemployment when raising wages, and it will further harm efficient private-sector work with ill-advised public works programs. The answer is to allow individuals to negotiate wages without the meddlesome hand of the state.