Stop outlawing jobs


The Trade Union Congress (TUC) is calling for the UK national minimum wage to be increased to £6 an hour from October 2010. In Scotland a government committee suggests the public naming and shaming and an increase in fines for employers who break the minimum wage. While in Jersey the Employment Forum has outlined plans to increase the minimum wage to £6.20. The sound of breaking windows fills the British Isles.

The timing of this is awful - not that there ever is a good time to outlaw jobs - but with unemployment set to continue to rise into next year, those at the margins will of course be adversely affected by restrictions on employer and employee. There is no getting around the fact that minimum wages create unemployment; there are few more obvious truths in economics. Murray Rothbard retorted to those that suggested the minimum wage has no effect on employment to ask why they didn't put it up significantly higher; their lack of response was telling. The marginal level that we live with discriminates against the most vulnerable, forcing them into the disabling clutches of the state.

Pushed as it is by unions, the minimum wage is a mask for special privilege. And as such it was infuriating to hear the ludicrous assertions a couple of months ago on the BBC Radio 4 programme Where did it all go Right? that the national minimum wage has been an unqualified success. To have to listen to Michael Portillo and Boris Johnson turning their backs upon logic in favor of a populist bandwagon was too much. In a time of high unemployment combined with dispendious welfare, to suggest that the national minimum wage is having no effect is fantastical.

It is about time a politician or two stood up for sound economics. Given the state of this nation, perhaps we could do with a British Warren Harding to lead this country. Any idea who could rise to the challenge?