Quoth the Raven
· QTR’s Fringe Finance
· May 18, 2026 at 07:02
· ⏱ 6 min read
| Read on Substack ↗
Summary
The article argues that minimum wage laws, not 'mismatch' or quitting behavior, are the primary cause of unemployment, because they set wages above market-clearing levels and destroy jobs for low-productivity workers. For markets, this is a theoretical piece with no direct security implications; it reinforces a free-market critique of interventionist labor policy.
•The author identifies minimum wage laws as the 'real gap' between labor supply and demand, citing Microeconomics 101: when minimum wage is above equilibrium, supply exceeds demand, creating unemployment.
•Example given: if market-clearing wage is $20/hour and minimum wage is set at $30/hour, employers lose $10/hour hiring a $20-productivity worker, leading to job loss.
•New York City Mayor Zohran Mamdani intends to raise the minimum wage to $30 by 2030, summarized as '$30 in '30'.
•Author rejects 'mismatch' theory as insufficient, arguing that government subsidies and credential mills produce grads without employer-demanded skills, but this is secondary to minimum wage distortions.
•The article notes that before the 1930s, wages followed supply and demand without minimum wage laws, and historical events like labor shortages after the plague raised wages naturally.
•Other market distortions cited as causing unemployment include central bank interest rate adjustments and interventions propping up unsustainable enterprises.