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Minimum Wages

When it comes to minimum wage laws, there are three possible outcomes: that the State mandated wage is less than those already paid; that it is equal to them; or that it is more than market conditions would normally allow.

In the first two cases, it is unnecessary.  The third condition, then, is the one which matters.

Labor, like any other commodity, is subject to supply and demand.  When there is a superabundance of work and not enough workers, wages rise.  When unemployment is high, and work is scarce, wages fall.  In all cases, business owners need workers to make money.  It is never in the interest of anyone who wants to grow a business not to grow a business by not hiring people.  Hiring always means more money for the business owner, IF there is money left over after he has paid his expenses, of which the largest is usually labor.

Let us say that a business owner collects $1,000 a week in revenues, and pays out $600 in costs.  If he can hire someone for $200 a week, he can still clear a profit, and free himself up for marketing.  If, however, he is forced by law to pay $400 a week, he will not hire anyone. He can’t afford it.

Let us say that someone desperately needs work, and would be willing to work for $200, but is forced by law to charge $400.  Both people lose.

Leftists do not ask themselves what the people who are competing for low wage jobs want.  They ASSUME they would rather either be paid more than they are perceived as being worth, or be unemployed.  This is almost certainly an error, though.

We have some 50% unemployment in black neighborhoods and poor rural areas, which is close to the high school drop out rate in both areas, and there is probably a lot of overlap between the two.

Kids who have not even graduated high school offer very little in terms of job and life skills.  If they are going to get hired by anyone to do anything, they will in most cases need to discount their labor.  Such a first job would amount to an apprenticeship.  By law, they can’t do this, and so in many cases they go years without getting that first job, never learn work skills, and never become optimally productive as citizens. 

Minimum wage is not intended for people who have careers, who put their time in over a period of years.  Even Burger King and the like pay more than minimum wage for virtually anyone who has worked there more than six months.

These laws do not raise up anyone.  On the contrary, they represent a barrier for entry to the job market for people who in many cases really, really need a job.