Article by Ben Doolin on Nov. 5, 2015
It’s the perfect example for explaining Statism… for power and wealth… politicians create problems for us. Then, in an attempt to ‘fix’ the problem… create even bigger problems.
The Minimum Wage, exists as ‘evidence’ that The State cares about poor people. The proponents claim that (by use of State violence, threatening employers that would pay less than the arbitrary amount) they are increasing the income for those ‘most at risk’.
The reality is that it simply makes ‘low value workers’ illegal to hire. If you produce at $5 and must be paid $10 an hour… you will simply be replaced with someone that can produce at least $10 per hour.
Promoters are also clearly ignorant of the fact that increasing wages will ALWAYS be met with changes by employers to compensate for that cost by reducing hours, requiring higher productivity… or replacing workers with automation.
A regular comment from promoters is ‘just raise prices’… which is a perfect display of economic ignorance. While a pizza shop owner might be able to compete against other pizza places… if they all have to raise their wages… (some might automate which still doesn’t leave a ‘level playing field’)… pizza places have to compete with ALL alternatives including nicer ‘sit down’ restaurants (that already paid higher wages… but now ‘low value pizza’ costs as much as a nice meal out) and simply cutting out restaurants all together… and just buying groceries.
The Minimum Wage has been brought into focus recently… because politicians have ‘sold us out’… taking bribes (um… I mean ‘campaign contributions’) to pass anti-competition regulations (over 800,000 of them) that have shrunk the US economy by more than 75%. There are 94,000,000 working age adults not in the labor force… the highest it’s ever been (going back to before women entered the workforce). There are 146,000,000 receiving some form of government assistance. With that many people ‘in bad shape’ (80% of Americans are in or near the poverty line) politicians are being forced to ‘fix what they broke’.
They don’t really care if their ‘solution’ works (hard to tell sometimes, the difference between stupid and evil)… all they care about is that the low information voters (particularly about economics) want them to do it.
The result is (completely predictable)… that the poor are worse off.