"It profits me but little that a vigilant authority always protects the tranquillity of my pleasures and constantly averts all dangers from my path, without my care or concern, if this same authority is the absolute master of my liberty and my life."

--Alexis de Tocqueville, Democracy in America

Wednesday, February 20, 2013

Milton Friedman on the Minimum Wage

I suspect that this clip is from the late 1970s, because it cites the federal minimum wage as being $2.50.   But everything Milton Friedman says here is still true, and he says it so clearly and with such vigor that it ought to be watched by everyone who cares about employment in America.   Listen until the end when he describes the minimum wage as "the most anti-Negro piece of legislation in the history of America."   Brilliant stuff.

Oh, by the way, the current unemployment rate for black male teenagers ages 16-19 is now 43%.   And that's among the black teenagers in the workforce.   The labor-force participation rate for black teenagers is 25%.   Only 14% of black male teenagers have jobs.   That's a national tragedy, and it has been caused by the people Friedman calls the "do-gooders" who have installed the minimum wage.


  1. Like many areas of human inquiry, Economics theory has evolved much since the 1970's. Research and debate continues but one thing is certain, Friedman's absolute view that a minimum wage costs job in all cases and is universally and irrevocably bad, is no longer valid. On 11/24/12 The Economist magazine published an article entitled, "The argument in the floor". It might help you get up to speed...

  2. The article the commenter is referring to details what is discussed as a "debate" among economists as to the effects of the minimum wage on employment. The debate is supposedly between two sets of economists, Card and Krueger on the pro-minimum wage side, and Neumark and Wascher on the anti-minimum wage side. But referring to it as a "debate" is misleading. What really happened is that Neumark and Wascher thoroughly debunked the infamous 1994 Card-Krueger study of New Jersey fast food restaurants which purported to show (via a telephone survey of restaurant managers) that a rise in the minimum wage had somehow caused employment in minimum wage jobs at fast food chains to increase. Using actual payroll records of the same NJ restaurants, they showed that the effect had been the opposite, a drop in employment, exactly as the classical economics model of Friedman predicted. The study can be found here:


    Another similar debunking is here:


    Certainly there are myriad reasons for the decline of low-skilled jobs in America, particularly in manufacturing. But the minimum wage isn't helping, and you'd have to have your eyes closed when you drive through an inner city like Milwaukee's, which I do every day, to believe otherwise.