Minimum wage laws are to economics what anti-vaccination is to biology – pseudoscience. Worse still, minimum wage laws hurt most the very people they are supposed to help.
Employers have no choice but to either raise prices or lay people off, advocates of min. wage laws seem commonly to think that business profit margins are upwards of 30% – 40%, in reality they are razor thin, hovering usually around 3% – 4% (This is the reason why ‘non-profits’ have not displaced for-profit based companies, profit margins are so low in most industries that even non-profits can’t operate at 3 – 4 percent lower costs, and usually the extra accounting and regulatory demands of running a non-profit eats that small percentage up instantly) Additionally the companies which can more easily absorb min. wage increases are the largest companies, driving out of business the very people advocates usually like (small business) and helping the business they dislike (large business)
When everyone raises prices to compensate for higher wages, the costs of goods goes up in the same amount – eating up that ‘increase’ in wages. Additionally, people who make more than the minimum wage get annoyed and also demand higher wages. It’s not just you that get’s a higher wage, it’s everyone in every industry. The net result is that though the number value on your paycheck is higher, that actual purchasing power of your hours worked either goes down or stays the same. This devaluing of your currency hurts people with savings the most (your average lower or middle class person trying to save for retirement and reduce their cost of living) and helps people who groups with large debt the most (if the purchasing power of every dollar goes down, then every dollar you pay back is worth less than it is was when you borrowed it)
Lastly, and mostly importantly, they are immoral. No interactions between people are moral unless they are voluntary – free of coercion. No one has the right to step in and demand an employer pay you less or more (backed by the threat of force) just as no one has the right to demand you work for less or more (backed by the threat of force)
eternitas 