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Governor Andrew Cuomo floated quite a few dubious ideas in his State of the State address yesterday, a couple of which are the subject of my Newsday column today—but the most dubious proposal of all came from Assembly Speaker Sheldon Silver in his own brief remarks before the governor spoke.

Silver said the Assembly’s top priority this year would be an increase in the state’s $7.25 an hour minimum wage.  He might just as well have announced that the Assembly’s top priority will be to increase unemployment among low-wage and entry-level workers.

From the Library of Economics and Liberty, here’s why:

Most noneconomists believe that minimum wage laws protect workers from exploitation by employers and reduce poverty. Most economists believe that minimum wage laws cause unnecessary hardship for the very people they are supposed to help.

The reason is simple: although minimum wage laws can set wages, they cannot guarantee jobs. In practice they often price low-skilled workers out of the labor market. Employers typically are not willing to pay a worker more than the value of the additional product that he produces. This means that an unskilled youth who produces $4.00 worth of goods in an hour will have a very difficult time finding a job if he must, by law, be paid $5.15 an hour.

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About the Author

E.J. McMahon

Edmund J. McMahon is Empire Center's founder and a senior fellow.

Read more by E.J. McMahon

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