Economics Volume II: Modern Economic ProblemsFetter, Frank A. (Frank Albert)
General
Economics Volume II: Modern Economic Problems
Fetter, Frank A. (Frank Albert)
Economics
At first glance the principles involved in the legislation limiting
hours and those in minimum wage legislation may seem to be the same.
But an important difference soon appears. In the former case the evil
is that of a too long working period, injurious to health, and this
can be reached directly and stopped by an efficiently administered
law. But in the latter case the real evil is industrial weakness and
incapacity such that the workers are unable to command "a living wage"
in a competitive market. A minimum wage law, by itself, neither cures
the industrial incapacity nor ensures employment to the industrially
weak at any wage. The law does not attempt to compel employers to
employ at the legal minimum wage every one who wishes to work; it
merely declares that the employer shall _not_ employ any one whom, in
his employ, he finds to be not worth that high a wage.
§ 10. #Some problems of the minimum wage#. Unless the demand for a
particular kind of service is absolutely inelastic (a rare if not
impossible situation in a large market), there must be fewer jobs
for the less capable workers at high than at low wages, other prices
remaining the same. Further, some of the less capable workers must be
crowded out of such jobs as remain; for an artificially higher wage
attracts into an occupation some from other occupations before paid
more highly. It seems to be admitted by the friends of minimum wage
legislation that this result is logically to be expected and that to
some degree it appears. Of course it is never possible to tell to just
what extent workers have been and are being excluded in this way from
any particular establishment or occupation. Forbidden to earn what
they can, the poorer workers must become dependent on charity. It
may be said, and perhaps truly: better this than underpaid labor
destructive to the health of the workers and evil in its competitive
effects upon other wage workers.
Public-domain text, read in full here on John Shaqi.
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