Labor Economics

Alan G. Futerman () and Walter E. Block ()
Additional contact information
Alan G. Futerman: University of the Latin American Educational Center
Walter E. Block: Loyola University New Orleans

Chapter Chapter 3 in The Austro-Libertarian Point of View, 2021, pp 61-68 from Springer

Abstract: Abstract This chapter offers a critique not only of raising government enforced minimum wages, but allowing them to continue in existence. This law makes it impossible for some unskilled workers to obtain employment, and raises no one’s wage in the long run. Minimum wages are defended, primarily, on the basis of an ethical (in our view, mistaken) point of view, not on economic grounds. Here we analyze the economics of wage determination, and explain why minimum wages thwart the process of increasing capital formation and thus real wages. Hence, since wages are the result of discounted marginal revenue products, any intervention to artificially increase them not only ends up harming workers on the margin (those whose productivity is below levels mandated by law), but also distorts the labor market, capital allocation, and economic growth and development.

Keywords: Minimum wage law; Unemployment; Justice; J64 (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-16-4691-1_3

Ordering information: This item can be ordered from
http://www.springer.com/9789811646911

DOI: 10.1007/978-981-16-4691-1_3

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().