Last year, the Military Order of the World Wars approached the Texas Public Policy Foundation about having someone present on the benefits of a free enterprise system at their Southwest Youth Leadership Conference aboard the U.S.S. Lexington in Corpus Christi.
After presenting to a number of students last year, the Foundation’s Economist Dr. Vance Ginn was invited back and presented his interactive workshop to 110 high school honors students last week.
Here is more information about these conferences nationwide:
The Military Order of the World Wars (MOWW) organization sponsors annual Youth Leadership Conferences (YLC) in 17 states across the nation. These twenty-five MOWW YLCs are recognized nationally for their patriotic education seminars, including elements of leadership needed to maintain a free society, concepts of a free enterprise system, and the founding principles upon which the United States of America was built. Attendees build an appreciation the American Constitution, its Bill of Rights, and an awareness of civic responsibilities associated with preserving rights and freedoms. Students also build public speaking skills that help them be better citizens and future leaders.
These top-notch, high school students from Texas were chosen based on a rigorous selection process by the MOWW. Several of these students are part of their school’s ROTC program. Though many of them are not familiar with the importance of free enterprise and harm of government regulations, Dr. Ginn’s workshop raises awareness of these important issues.
As part of their program, Dr. Ginn presented his minimum wage experiment and explained the differences between Capitalism and Socialism.
After a couple of rounds of the minimum wage experiment where some of the students are employers and others are workers, the students clearly see that the average wage increased when there was a minimum wage compared to a free market.
However, the higher cost to firms associated with a minimum wage substantially increased unemployment. This is similar to the findings by the Congressional Budget Board in their report examining the effects of raising the minimum wage from $7.25 per hour to $10.10 per hour.
The last round of the experiment allows workers to be more productive than in earlier rounds, whereby firms get more revenue when hiring additional workers. Despite there being no minimum wage in place, the results from this round were no unemployment and a higher average wage compared to earlier rounds without more productive workers.
This experiment shows there’s no need for the government to impose a higher minimum wage, or any minimum wage at all, for workers to receive a higher pay. It is the determination of the workers to decide what wage they will accept and what wage firms are willing and able to offer based on a number of market factors, not some arbitrarily chosen government mandate.
Workers are able to demand a higher wage by increasing their human capital through education, technical skills, and on-the-job training, which all can be limited when there is a minimum wage.
Simply, wages are set by individuals, employers and workers, negotiating together to determine the best allocation of resources. For greater prosperity, employers and workers should have the liberty to determine a wage that best meets both their needs without the government telling them they cannot negotiate a wage lower than a legally binding minimum wage. This reduces the freedom to choose and destroys economic prosperity in the process, noting the benefits of Capitalism compared with the substantial costs of Socialism.
The best path to prosperity is through free enterprise, individual liberty, and economic freedom—the principles we promote at the Texas Public Policy Foundation. Unfortunately, these are concepts that many students never learn. With the Foundation’s outreach to high school students on these important principles, there’s a better chance that all Americans will have a brighter future.