[marketcorrection] Don Boudreaux: Capital Can Substitute for Labor

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Posted by Don Boudreaux:
Capital Can Substitute for Labor
http://marketcorrection.powerblogs.com/posts/1210947389.shtml


   8 December 2007
   Editor, The Baltimore Sun
   To the Editor:
   Labor-union official Valerie Long asserts that office-cleaning jobs
   "have to be filled by someone" (Letters, December 8). This mistaken
   belief misleads many persons, including Ms. Long, to suppose that
   employers have no choice but to pay statutorily imposed higher wages.
   In fact, no job must be filled. Each worker is hired only when an
   employer gains more from hiring that worker than it costs that
   employer to make the hire. Even for high-priority tasks, such as
   keeping office buildings clean and smoothly operating, employers can
   substitute machines and other technologies for workers. For historical
   evidence, Ms. Long might explore how a hike in the minimum-wage
   prompted building owners in the 1960s to speed up their substitution
   of automatic elevators for manual ones operated by low-skilled
   workers.
   Sincerely,
   Donald J. Boudreaux
   Chairman, Department of Economics
   George Mason University