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Free Teenagers: Repeal the Minimum Wage

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An editorial in the Saturday New York Times indirectly confirms what I wrote in my recent article Why Do Daily Kos and Alternet Support a Racist Program?

In that article, I pointed out that a minimum-wage law locks out of the labor market all those people whose labor is valued by employers in the marketplace at less than the mandated minimum.

For example, if the minimum wage were set at $100 an hour, everyone could easily see the enormous damage to workers that such a law would produce. Every worker whose labor was valued at less than $100 per hour would be immediately laid off.

This principle, as I pointed out in my article, is no different with respect to a $7.25-per-hour mandated minimum wage. The number of workers locked out of the labor market will obviously be less than if the mandated minimum were $100. Nonetheless, those people whose labor is valued in the marketplace at less than $7.25 are laid off or never employed. As I pointed out in my article, the ones who feel this unemployment burden the most are inner-city black teenagers.

Here is what the Times editorial states:

The problem of joblessness among teenagers is far more severe in poor, minority communities. Those are the places where violent, criminal street gangs actively recruit disaffected teenagers. Teenage joblessness has other long-term consequences; young people who fail to find early jobs are more likely to be unemployed or underemployed into their 20s and permanently trapped at the margins of the economy.

Unfortunately, but not surprising given the depth of economic ignorance among liberals (as I observed in my article), the Times does not point to the root cause of the problem: the minimum-wage law. In order to resolve the teen unemployment problem, all that would be needed would be a repeal of the minimum-wage law. Then, those teenagers whose labor is valued at less than the mandated minimum would be free to compete for jobs in the marketplace at less than the mandated minimum.

Instead, the Times takes the standard liberal approach pile one intervention on top of another intervention. The paper is calling on Congress to approve hundreds of millions of dollars for a jobs program. The Times correctly observes that bills like these are often portrayed as pork barrel spending but the Times justifies such spending because, it says, summer jobs help young people in desolate communities find meaning in their lives while improving their long-term work possibilities.

The Times gets it both right and wrong, however. While summer jobs do in fact bring meaning to young peoples lives and help them to learn job skills while earning a bit of money, this principle applies only in the free market, where they are freely competing for the jobs they want. An artificial jobs program induced by governments taxing and spending is nothing more than a boring, meaningless, dead-end dole-distribution system that provides nothing of long-term value to young people.

There is one and only one just, moral, and pragmatic solution to the problem of teenage unemployment, especially for blacks in the inner city: Repeal the minimum wage.

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Jacob G. Hornberger is founder and president of The Future of Freedom Foundation. He was born and raised in Laredo, Texas, and received his B.A. in economics from Virginia Military Institute and his law degree from the University of Texas. He was a trial attorney for twelve years in Texas. He also was an adjunct professor at the University of Dallas, where he taught law and economics. In 1987, Mr. Hornberger left the practice of law to become director of programs at the Foundation for Economic Education. He has advanced freedom and free markets on talk-radio stations all across the country as well as on Fox News’ Neil Cavuto and Greta van Susteren shows and he appeared as a regular commentator on Judge Andrew Napolitano’s show Freedom Watch. View these interviews at LewRockwell.com and from Full Context. Send him email.