In recent years, the “living wage” movement has made great strides in raising the minimum wage to $15 an hour in many locales. According to Wikipedia,
A living wage is the minimum income necessary for a worker to meet their basic needs. This is not the same as subsistence which refers to a biological minimum. Needs are defined to include food, housing, and other essential needs such as clothing. The goal of a living wage is to allow a worker to afford a basic but decent standard of living.
Certainly, it is difficult to provide for one’s basic needs, let alone support a family, when one is making less than $15 an hour. But fundamentally, that fact is irrelevant.
Minimum wage laws prohibit workers from offering to work for less than a prescribed amount. A low-skilled worker has little to offer an employer, and rationally, he cannot expect to receive much pay. But a low-paying job is about more than just a paycheck–it also includes obtaining the skills and experiences that enable one to command a higher wage in the future.
Nobody begins their career at the highest salary level. This is true of doctors, engineers, teachers, and ditch diggers. It is true of every profession. One’s salary is based on one’s productivity. Obtaining greater experience, knowledge, and skills is the means to greater productivity. A low-paying job is an opportunity to obtain greater experience, knowledge, and skills. But minimum wage laws prohibit many low-skilled workers from having that opportunity.
Imagine a 16-year-old who has never had a job. He applies to a fast food restaurant, but the manager also has applications from older individuals who have held jobs. If he has to pay them all the same, he is more likely to hire an individual with some work experience. But what if the 16-year-old was willing to work for half of what the other applicants want? The 16-year-old simply wants an opportunity, and he is willing to pay for it with a lower wage. However, minimum wage laws would prohibit the teenager from offering his services for that price. He is prohibited from acting as he thinks best. He becomes a victim of the “living wage” movement.