Friedman Excerpts

Minimum-Wage Rates

September 26, 1966

Congress has just acted to increase unemployment. It did so by raising the legal minimum-wage rate from $1.25 to $1.60 an hour. The result will be and must be to add to the ranks of the unemployed.

Does a merchant increase his sales by raising prices? The situation is not different for other employers. The higher wage rate decreed by Congress for low-paid workers will raise the cost of the goods that these workers produce--and must discourage sales. It will also induce employers to replace such workers with other workers--either to do the same work or to produce machinery to do the work.

Some workers who already receive wages well above the legal minimum will benefit. ... The groups that will be hurt the most are the low-paid and the unskilled. Many well-meaning people favor legal minimum-wage rates in the mistaken belief that they help the poor. These people confuse wage rates with wage income. It has always been a mystery to me to understand why a youngster is better off unemployed at $1.60 and hour than employed at $1.25.

Decentralizing Schools

November 18, 1968

The key to the present [quality] problem is that schooling is not only financed by government but also mainly administered by government. As a result, parents can exercise control over schools only through the political process. If a consumer does not like the service he gets at a department store, he can go elsewhere. He does not first have to persuade 51 percent of the customers (plus many who do not shop at the store at all) that they should change the management.

The problem is exacerbated in the slums because the poor cannot afford private alternatives and yet have been largely impotent politically. [An] alternative is to introduce competition in schooling. Why not say to every parent: "The community is committed to spending X dollars a year on schooling your child. If you do not send your child to our public school, you relieve us of this cost. In return, the community will give you a voucher for X dollars a year per child. You can use this voucher to purchase schooling at any other approved school, public or private, but for no other purpose."

A Volunteer Army

February 11, 1974

A military draft is undesirable and unnecessary. We can and should man our armed forces with volunteers--as the United States has traditionally done except in major wars. ...

The draft is inequitable because irrelevant considerations play so large a role in determining who serves. It is wasteful because deferment of students, fathers and married men jams colleges, raises the birth rate and fuels divorce courts. It is inconsistent with a free society because it exacts compulsory service from some and limits the freedom of others to travel abroad, emigrate or even to talk and act freely. So long as compulsion is retained, these defects are inevitable. A lottery would only make the arbitrary element overt. Universal national service would compound the evil--regimenting all youth to camouflage the regimentation of some.