Minimum Wage Laws' True Victims

On January 1, 2023 several states across the nation officially began enforcing new minimum wage laws, which were voted in last November.  California has the highest, at $15.50/hour.  In Washington D.C., it’s $16.10.  And the push is on to make $15/hour the federal standard.

Wage controls are directed at employers, but they are not the ones who bear the pain.  If the government makes it too expensive to hire low-skilled workers, then employers will simply figure a way do without.  The real victims are the unskilled and the low-skilled, the very bottom of the labor pool, the lowest of the low, the poorest of the poor.  So much for "caring for the little guy."

Entry-level job

If someone wants to work for some dollar amount per hour, and some employer is willing to pay that amount, then that should not be a problem.  For many, a low wage is preferable to zero wage.  These are called "entry-level" jobs, and they are an essential part of learning good work skills.  But the minimum wage law rips that option away by destroying entry-level jobs.

Government is not a deity

It all stems from the crazy notion that government can magically turn a low-skilled worker into a high-skilled worker via an act of legislation.  It's just another manifestation of the notion that government is some kind of super-human deity. 

The true facts are this:  The value of anything is governed by supply and demand.  Wage control advocates try to argue that the laws of supply and demand don't apply to labor.  But if that was the case, then why are we messing around with a measly $15 an hour?  If no jobs will be lost, then we could make the minimum wage any amount we want!  Why not $20 an hour?  Why not $100 an hour?  If you say that the law has no downside, then by golly, let's really eliminate poverty for good and make everybody wealthy!

The fallacy, of course, is that supply and demand do indeed apply to labor.  In a free market, supply and demand will balance each other out, as long as the price is free to rise and fall.  Any time the government enacts wage and/or price controls, it creates artificial shortages or excesses.  The minimum wage law creates an excess supply of unemployed workers at the low end of the wage scale.

So what is the alternative?  How can we help the poor and downtrodden in our society earn better pay? 

There are two aspects to the answer:  the macro or "big-picture" solution, and the micro or "small-picture" solution.

Bureaucracy: barrier to a strong economy

First the macro side:  The key is a strong economy.  As the economy grows stronger, more businesses make more profit.  As they make more profit, they need more workers, and so the demand for labor increases, and as the demand for labor increases, wages go up.  How do you make the economy stronger?  Easy:  get government out of the way!  Reduce or eliminate the regulation, bureaucracy, taxes, the special favors and "crony capitalism", devaluing the currency, and all the meddling in business at all levels of government.  Free enterprise is the time-tested way to create wealth and raise the standard of living for all.  Employers are not the bad guys, for they are the ones who actually create the jobs.  Leave them alone, and provide neither help nor hindrance.

Next the micro side:  High-paying jobs are out there.  In the U.S. alone, millions upon millions of people make big, fat, hefty paychecks.  If you want to make big bucks, you can make big bucks.  But you will need two things:  you need brains, and you must be willing and able to work hard.  Then choose a good high-paying career and go for it!  Don't choose some minimum-wage entry-level job for your "career" and then go crying to the government because of your poor choice.