Acton Institute Powerblog

What’s the Right Minimum Wage?

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What’s the perfect minimum wage? $10 an hour? $20? $50?

Economist David Henderson explains why it should be “zero.” As Henderson explains, when the state mandates a minimum wage (or an increase), it makes harder for unemployed people to find work and forces business owners to cut the hours of lower-skilled employees.

Joe Carter Joe Carter is a Senior Editor at the Acton Institute. Joe also serves as an editor at the The Gospel Coalition, a communications specialist for the Ethics and Religious Liberty Commission of the Southern Baptist Convention, and as an adjunct professor of journalism at Patrick Henry College. He is the editor of the NIV Lifehacks Bible and co-author of How to Argue like Jesus: Learning Persuasion from History's Greatest Communicator (Crossway).


  • Bill Hickman

    This video is a great example of what annoys me about conservative arguments on the minimum wage. Henderson conjures an incredibly simple supply-demand curve in his head and decides that’s exactly how the labor market behaves. He then makes confident predictions about what employers will *certainly* do if the minimum wage goes up. Has he forgotten that the minimum wage is a real thing that exists in the world? Jurisdictions raise it all the time, and economists can and do conduct *empirical* research to figure out what happens when it goes up. The newest and best empirical research doesn’t tend to support Henderson’s over-simplified model of the minimum wage’s effect on the economy.

    • Henderson is both right and wrong. Economic theory states that a minimum wage will cause unemployment but only if the min is higher than the market rate. The US min wage has almost always and everywhere been near or below the market rate. That’s why every study of empirical data finds no evidence of an effect on employment. The empirical studies confirm that the min wage has never deviated enough from the market rate cause unemployment. You can get a pretty good idea of the market rate for entry level jobs by what Walmart and McDonald’s pay.

      Of course, politicians have always known this. The min wage allows them to stay in good graces with their socialist buddies while never actually doing anything. If politicians really thought they could set any rate they wanted without causing unemployment they would set the min wage at $50.