Minimum Wage Kills Jobs

Labor, like any other commodity, should be competed for. The free market economy thrives on competition and freedom. When government begins to try and regulate prices that is when issues begin to appear. This can be seen greatly in the Minimum Wage.

Admittedly the idea behind the minimum wage is a kind one. The evil employers trying to keep costs down stiff their employees by not paying them enough! Therefore, we ought to force employers to pay a set amount. This is an innocent idea, on the surface at least, and it works. It works buy votes.

The Left loves the minimum wage. Not because it’s a good idea, even the Left can acknowledge the facts of the minim wage. It doesn’t matter to them, the Left thrives on pandering above all things. They spin themselves as the ones who truly care and the ones who will take care of you. What they leave out is that to do this they will increase spending, make government bigger, and ultimately take away your freedoms.

On the Right we, for the most part, know that the government is terrible at everything. The government is especially bad when it comes to government enforced price controls. At the heart of it that is all minimum wage is. It is the government placing a price control on the cost of labor. The facts tell us that every time the government attempts a minimum wage, the job market does nothing but suffer. Even the first minimum wage under FDR forced employees out of jobs! Employees that were deemed unworthy for the payroll found themselves out of jobs immediately, and during the height of the depression it certainly didn’t help things.

In the book Economics in One Lesson Henry Hazlitt writes, “You cannot make a man worth a given amount by making it illegal for anyone to offer him anything less. You merely deprive him of the right to earn the amount that his abilities and situation would permit him to earn…” Employers know this, but employers cannot do anything about this when there is a minimum wage.

What happens is that in order to pay everyone this minimum wage employers are forced to do one of three things: raise prices, cut costs, or shrink their profit margins. Costumers are always demanding low prices, and employers, not wanting to go under, cannot cut profits. All that is left is to cut costs and to do this they are forced to cut the number of hours they allow an employee to work.

While an employee may be ‘worth’ a certain amount this means nothing when the employer is forced to not let them work. Employees not wanting to loose government benefits sometimes even demand to work less hours! The big government argument can be had another time, but in essence these employees have married the government and don’t want to be cut off.

This isn’t to say that there is no way to raise wages. There are plenty of ways to raises wages; new inventions and improvements, more efficient management on the part of employers, by better education and training, among others. Instead of focusing on imposing more burdens on employers the government ought to encourage employers to expand. In a free market economy, when there is more freedom in wages there are more jobs and more opportunity.


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