Market Correction

12 August 2006

Editor, The Wall Street Journal
200 Liberty Street
New York, NY 10281

Dear Editor:

There are heaps of bad arguments for raising the minimum-wage. Perhaps the worst, offered by Joel Schipper (Letters, Aug. 12), is that a minimum-wage increase is justified if a full-time worker earning the current minimum wage cannot afford to live "in a city such as Chicago."

Mr. Schipper's argument implies that incomes can be raised by dictate, to whatever level is necessary to live in some locale. If this notion is correct, why settle for enabling workers to live only in the likes of Chicago? Why not raise the minimum wage so that everyone can afford to live in, say, Nantucket, Hyannis Port, or Beverly Hills within walking distance of Rodeo Drive?

"That's ridiculous!" is Mr. Schipper's likely reply. And I agree - which is why I marvel at his belief that incomes can be set by dictate according to the cost of living.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University