Letter to the editor: Minimum wage messes with market conditions | SummitDaily.com

Letter to the editor: Minimum wage messes with market conditions

Stephen V. Bainbridge

Economics 101 will tell you much what your Dad might have: “There is no free lunch.” If government gets involved with setting wages, prices, what is produced or how much, only mischief happens.

A set minimum wage, however good the intent, only leads to fewer people being employed. Economics and production is a combination of land, labor and capital, all driven by technology and, of course, the desires of the customer voting with their dollar for the goods and services they want.

Consequences of a minimum wage:

Employers seek alternatives; instead of hiring more waiters, they might seek more self-service or technology to reduce the number of waiters or order takers, which equals fewer workers. Notice more technology systems at McDonald’s lately or at Walmart with the greater numbers of self-checkout terminals?

Since an increase in wages will be passed on to the consumer, they will typically buy less or will seek alternatives or substitutes. Our tourists and skiers start sensing that we are getting to be very expensive, and they visit less or go to another tourist ski town. Ever go out to a sit-down dinner in a tourist town in New York State? A nice dinner for two is more than $150 instead of the $75 that we are used to in Colorado.

These schemes to fix wages are problematic. Even the minimum-wage worker is going to have to pay the higher prices for all that they need. Whenever government gets involved in business, it often drives up prices or reduces the product that we all buy. Somebody — and usually it’s everybody — ends up with a worse deal. Messing with market conditions distorts, almost always against the general good, the signals that make our economy most efficient.

Support Local Journalism

Support Local Journalism

As a Summit Daily News reader, you make our work possible.

Now more than ever, your financial support is critical to help us keep our communities informed about the evolving coronavirus pandemic and the impact it is having on our residents and businesses. Every contribution, no matter the size, will make a difference.

Your donation will be used exclusively to support quality, local journalism.

For tax deductible donations, click here.

Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.

User Legend: iconModerator iconTrusted User