The Minimum Wage and Unions in Action: Economics at Home

Like so many parents, we try to teach our children the value of a dollar by giving them opportunities to earn money around the house. Some parents do the weekly allowance thing and then have a set of chores that have to be done each week by their kids in order to earn it. In our house, we pay the kids to do chores on a per job basis. It’s voluntary. Do you want to earn money? The rate for unloading the dishwasher is $1. The rate for building a fire is $2. Grass cutting is priced by the section (we’re on almost 3 acres). Etc.

Our youngest boy said we should pay him more for unloading the dishwasher. He said we should pay him $5. We told him it’s not worth $5 to us; at that rate we’d just as soon do it ourselves. We told him it’s worth $1 to us (which is a rate of $20 per hour!) and no more. In addition, our other two kids often choose to earn $1 to unload the dishwasher, so our youngest boy is not the sole labor force. If the government forced us to pay the kids $5 to unloaded the dishwasher, it would continue to NOT be worth $5 to us, and all 3 children would lose the opportunity to earn $1 unloading the dishwasher, because we, the parents, would simply choose to do it ourselves.

Our youngest boy decided it’s not worth $1 to him to unload the dishwasher. Why? Because when he goes to his dad’s house, he can just ask for money and get it for nothing. Why work?

“Economics at home” says a lot about the minimum wage, incentives, and entitlements. Furthermore, if our youngest boy were to unionize the labor force by convincing his step-siblings to demand $5 to empty the dishwasher as well, the exact same thing would happen. They would all be out of a job.

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