4 Reasons Why There Should NOT Be a Minimum Wage
Introduction
As more and more people get pushed out into the real world, they typically find themselves working at a low skilled job making minimum wage. However, not being able to pay for a $600 iPhone was not part of the plan. As people come to this realization, they demand an increase in the minimum wage expecting that they will get a raise for everyone without any consequences for themselves or others. That’s where I come in. To tell you the many unintended side-effects of raising the minimum wage, and to take it a step further and tell you why we shouldn’t even have a minimum wage in the first place.
Here are 4 reasons why there should NOT be a minimum wage:
1. Wages increase naturally (without minimum wage) since businesses compete with one another on the cost of labor. Example: If Target pays $2/hour higher than TJ Maxx, and Target gives out better benefits and a better working environment, Target will be able to employ more people and TJ Maxx will lose business.
2. Lower skilled workers will lose their jobs, causing an increase in unemployment. If a janitor makes $6/hour and the minimum wage is raised to $10/hour, the business owner will decide that a janitor is not worth the money. So he'll have another employee work extra hours to cover the shift of the janitor, causing workers hours to go up. (or better yet, buy a machine that does the easier work)
3. It makes it harder for young/inexperienced people to find jobs. The amount of revenue that a young/inexperience person would create is very little. So business are stricter on who they employ and they'll focus mostly on hiring those with more experience.
4. America loses jobs. Because of the side-effects of raising the minimum that I stated above, businesses are forced to leave and do business elsewhere with more free market principles, less regulations, taxes, and wage laws.
Simple economics ;)
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Conclusion
As time goes on and people depend more and more on government and see it as the provider of everything, our entire economy will go down. I say just keep government out of business, and let the free market and private sector work its magic. The government is constantly overstepping their bounds and trying to over regulate the economy to make the country safer. Yet, every time they do, it ends up backfiring with unintended consequences and more problems than the initial problem they attempted to solve.
“As government expands, liberty contracts.” - Thomas Jefferson
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Additionally:
Because in the end wages paid are a part of the end price of a product, minimum wages raise the price of products, thereby raising the cost of living for everyone (or reducing the buying power of everybody, leading to a demand for even higher wages, without generating any real improvement of living conditions for anybody in society)
Exactly. Especially small businesses who don't have the money to pay such high wages when they're first starting out, they're forced to make their product or service even more expensive.