California is on the verge of increasing the statewide minimum wage to $15, from $10. According to one pro-minimum wage policy advisor, ‘It would mean a raise for one of every three workers in the state.’
If this were the case, then why stop at one-third of the workers in California? Why not raise the minimum wage to match the $170,000 average salary for California judges, which works out to be $81.73/hour for a 40-hour work week?
The fact that they limit their recommendation to $15/hour proves that the legislators and proponents of the policy understand that there is a tradeoff at work. The same applies for the growing number of people that advocate the same $15/hour minimum wage for the whole country. For some non-arbitrary reason, they have chosen $15, and not $20, $16, or even $15.01. They understand that we can’t just magically give everybody a raise or wave a wand to make goods and services more plentiful. Minimum wage proponents must anticipate that the benefits of the policy outweigh the costs of the policy, or else they wouldn’t be a proponent of the policy.
Many of the proponents are probably just going along with what others around them are petitioning, without giving it much thought. Others may have articulable reasons for $15/hour, but it can’t be to help those with low incomes achieve higher incomes, or to raise everybody’s standard of living, because the policy does nothing to bring about those ends, and is even deleterious to those ends. Their reasons may be selfish, like to get more votes to stay in office or to hopefully increase their own wages as employers shift their demands among different types of laborers.
This post was published at Ludwig von Mises Institute on MARCH 28, 2016.