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Milton Friedman on Wages, unions, and the minimum wage

Why would Congress do such a thing? Because the adverse effect on the poor is diffuse and its source misunderstood and hence produces little political pressure. Effective pressure is exerted by organized groups that welcome the effect of a high minimum-wage rate in strengthening unionized and skilled workers vis-a-vis nonunionized and unskilled workers and in protecting employers in high-wage areas (the North) from the competition of employers in low-wage areas (the South). These organized groups find ready allies in the liberal reformers whose lack of understanding of economics misdirects their sincere concern for the disadvantaged.
Legislating Unemployment
Column, 1972, Newsweek (1972; the issue current on June 28, 1972); reprinted in full in the Congressional Record, Extensions of Remarks, June 28, 1972, p. 23100, Congressional Record, June 28, 1972, p. 23100
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  1. It is a tragic but undoubted legacy of the past—and one we must try to correct—that, on the average, Negroes have lower skills than whites. Similarly, teen-agers are less skilled than older workers. Both Negroes and teen-agers are only made worse off by discouraging employers from hiring them. On-the-job training—the main route whereby the unskilled have become skilled—is thus denied them.
    Newsweek column of September 26, 1966
    Column, 1966, Newsweek (September 26, 1966), his first Newsweek column; quoted by Friedman himself in “Legislating Unemployment” (Newsweek, 1972), reprinted in the Congressional Record, Extensions of Remarks, June 28, 1972, p. 23100. Later collected in An Economist’s Protest (1972)., Congressional Record, June 28, 1972, p. 23100
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  2. A worker is protected from his employer by the existence of other employers for who he can go to work. An employer is protected from exploitation by his employees by the existence of other workers whom he can hire. The consumer is protected from exploitation by a given seller by the existence of other sellers from whom he can buy.
    Free to Choose
    Book, 1980, Ch. 8 "Who Protects the Workers?", p. 246
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  3. The true minimum-wage rate is zero—the amount that an unemployed person receives from his nonexistent employer. This minimum-wage rate will not be affected by the new law. Rather, the law will increase the number of persons who receive a wage rate of zero.
    Legislating Unemployment
    Column, 1972, Newsweek (1972; the issue current on June 28, 1972); reprinted in full in the Congressional Record, Extensions of Remarks, June 28, 1972, p. 23100, Congressional Record, June 28, 1972, p. 23100
    Checked against the sourceRead the original

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