How does the minimum wage help the elderly?
How does the minimum wage help those with disabilities?
The higher the minimum wage, the higher the price of goods and services. (Which obviously doesn't do anything for the elderly, the unemployed, and the disabled. It makes it harder for them to get by. See here.)
Does the minimum wage help those with the least skills get a job?
"Ok, but what about good workers? How does the minimum wage help them?"
How does the minimum wage help those who really want to work but can't find work?
The minimum wage makes it particulary hard for immigrants with poor English to find work, or to start a business where they wish to employ others. Many of our cultural ghettos are largely the result of the minimum wage.
So if a high minimum wage is bad for business, why do some businesses support an increase in the minimum wage?
In general, high minimum wages hurt small businesses more than they hurt big corporations. (For most small businesses, wages are their biggest expense.)
It's worth considering just how important small business is.
A quick google search will reveal how many businesses fail. Most of those businesses are small businesses and many of those business owners (perhaps most) worked for less than what they paid their workers while working much longer hours. Is that fair? Is it fair to those workers who would rather work for less and still keep their jobs, but lose their jobs when their boss goes bankrupt?
"But what about all those studies which say that raising the minimum wage has a minimal effect on unemployment?"
"But doesn't the minimum wage protect workers from people like Edgar the exploiter?"
Approximately 96% of all workers in the US are paid above the minimum wage. Why are so many employers paying workers more than they are required to pay by law? If the exploitation theory of labor was correct, they would not be paying workers more than they had to. See Exploitation Theory.
In fact, it is the minimum wage that has been used to exploit the black community in America.
Some people think increasing the minimum wage results in more money being spent into the economy, but is that true?
Those who believe that increasing the minimum wage results in more money being spent into the economy assume that employment levels will remain the same when the minimum wage is raised; but when small businesses owners are forced to pay higher wages they sometimes have to lay off workers in order to stay in business—resulting in higher unemployment and less money being spent into the economy. To illustrate this point, suppose you are a small business owner who employs four people at $12 an hour. The government increases the minimum wage to $15 an hour. Because of the wage increase you have to lay off one of your workers. So now, your workers are spending $45 into the economy for every hour worked, but before the wage increase they were spending $48 into the economy for every hour worked. (Or instead of one of the workers losing their job, all four workers keep their jobs but they work less hours. Seattle’s minimum wage increase bore this out. See here.)
Many of the so called solutions to societies problems create more problems. Maybe it's time to rethink a few things.
There are many hidden costs regarding a minimum wage which few seem to be talking about.
Here are my observations.
1. If something hurts businesses, particularly small businesses, it is almost always bad for workers.
2. Big businesses tend to support the minimum wage more than small businesses. Why? It helps restrict new competition.
3. The minimum wage helps unskilled workers at the expense of even lower skilled workers (they're simply not worth the minimum wage). This is particularly hard on immigrants with poor language skills, people with disabilities, the young and the elderly. Work experience and the opportunities which come with it are valuable. Isn't it better for a person to get paid a little bit for doing something than getting paid a little for doing nothing (i.e. government welfare)? So instead of helping the most vulnerable people in society, the minimum wage keeps them unemployed and increases the prices of goods and services making their bad situation even worse.
4 . The minimum wage often causes small businesses to employ less people while making the remaining workers work harder. It leads to under-staffing, poor customer service and more stress in the workplace.
5. Many racists have supported the minimum wage in order to keep minorities out of the work force. See Davis Bacon Sellout - Walter Williams. See also Why racists love the minimum wage laws by Thomas Sowell. (And in case you don't know, Thomas Sowell is an American of African descent.)
6. Those of us who do work, are working longer and longer hours to support the unemployed. This means more broken marriages, more broken families. This hurts the economy making it even harder for the unskilled to get a job.
So given all these factors, what's the right minimum wage?
But what about wages prior to the 20th century? Workers were often abused and paid very little.
This was mainly because of the institution of slavery. Slavery has a devastating effect on wages. When slavery ended, wages began to rise. (This is one reason conditions for the poor in the 19th century were generally better than they were in the 18th century.)
The irony about the minimum wage is that without it there would soon be near full employment, a stronger economy and a shortage of labour which would lead to much higher wages.
The best way to help those with few job skills to get good paying jobs is to increase employment levels to maximum levels.
Now you might say, "These arguments sound strong, but without a minimum wage who will protect the rights of workers?"
Whether you love or hate the man in the video below, what he says in this lecture should be carefully considered when attempting to answer that question. See also Exploitation Theory.
It's time we slowly reduced the minimum wage and unemployment benefits—perhaps by 10% per year for 5 years. (But if the minimum wage was eventually removed, what is to stop an employer employing someone for 70 hrs per week while paying them next to nothing? The government would have to enforce some laws regarding contracts between employers and employees. They would have to implement legislation which went something like this: "After 35 hrs a week, overtime, at time and a half (or more) will be paid (on whatever the agreed wage is)." The government would also have to ensure that workplace health and safety regulations were in place to ensure safe work environments.
See also Did FDR End the Great Depression?
Capitalism: The Cure for Racism?