Low Wage Workers Support Their Own Demise

Maine Governor Paul LePage and Republicans in the state legislature are supporting legislation to loosen labor laws for people 20 and under. From Huffington Post:

The minimum wage in Maine is $7.50 an hour, and there is no training or subminimum wage for students. But under a new piece of legislation introduced in the state’s House of Representatives, employers would be able to pay anyone under the age of 20 as little as $5.25 an hour for their first 180 days on the job.

The bill, LD 1346, also eliminates the maximum number of hours a minor 16 years of age or older can work on a school day and allows a minor under the age of 16 to work up to four hours on a school day during hours when school is not in session.

I oppose the minimum wage entirely but I support measures to loosen the employment standards. Unfortunately the proposals aren’t appreciated by everyone:

A national advocacy group fighting for the rights of lower-wage workers has a new ad out criticizing Maine’s governor for trying to loosen the state’s employment standards.

“Governor Paul LePage wants to roll back child labor laws,” says the narrator of the spot, which is sponsored by the National Employment Law Project (NELP) and the progressive Maine People’s Alliance (MPA). “He supports legislation to have kids work longer hours, later at night and for less than minimum wage.”

The ad states “Gov. Paul LePage supports legislation to have kids work longer hours, late at night and for less than minimum wage.” More Orwellian language; the legislation allows kids to work longer hours. Quite obviously no one would be forced into work under this proposal but younger people, who are categorically unskilled, would have greater opportunity to find employment. I confidently suspect opposition to such liberation from labor restrictions is due to fundamental economic ignorance:

With Maine’s unemployment above 7 percent, state Rep. Paul Gilbert (D) wonders why Republicans are pushing to create a pool of cheap labor when so many people are begging for jobs.

“If we had a shortage of job applicants or potential workers, then you could look at other populations to ease that strain on the workforce,” Gilbert told The Huffington Post. “But we don’t have that right now. We have an excess of job applicants here in Maine, as well across the country.”

Precisely – labor restrictions cause a surplus of workers due to the price floor on wages that keeps the price of labor (wages) from reaching equilibrium (unless, of course, the equilibrium price is above the price floor). Removing the minimum wage, or lowering it, will not “create a pool of cheap labor.” That pool of prospective employees already exists, only they have nowhere to go. Eliminating or lowering the minimum wage would allow more businesses to hire from that pool.

Unfortunately, due to federal usurpation of state power and the extensive definition of interstate commerce, any state law setting a minimum wage below the federal rate will be virtually useless.

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