Source: American Institute for Economic Research
by Donald J Boudreaux
“The most obvious error in using the ‘they can afford it’ argument to justify a hike in the minimum wage is that having on hand enough cash to purchase something at a particular price is hardly a condition sufficient to ensure that such purchases will be made. … You, I’m sure, can afford to buy baby diapers. But if you don’t have a baby, the ‘affordability’ of baby diapers to you will not prompt you to run out and buy them. The gain you’d get from owning diapers is less than the cost you’d incur to buy them. And so it is with the employment of low-skilled workers.” (05/01/24)