Do you think we need to do something about this?
First of all, a minimum wage worker usually can’t work 40 hours a week because of the Affordable Care Act. I know this because I was affected by it. I could only work up to 30 hours a week otherwise I would be considered full time.
The minimum wage should be $0.00 for a plethora of economic and moral reasons.
Whenever the minimum wage is increased, it prices people out of the market. So if minimum wage goes up and a business cannot afford the increase in wages for all its minimum wage employees, then the business will fire the less skilled employees. This kills Mom and Pop shops. Thus, unskilled laborers and people are are already struggling will not have a job. These unskilled laborers need a chance to climb the economic ladder that the minimum wage price floor prices them out of and contributes to unemployment.
An individual’s unemployment hurts the economy because in a free market his skills would be put to use to make him money so he can save money and spend money which would help the economy.
Furthermore, there is an additional financial loss because the unemployed rely on government unemployment benefits. Taxes are extracted by the government from people to pay for the programs. That is money that could be better spent in the free market to advance technology and society as a whole.
Finally, cost will increase everywhere or the hours of operation of a business will decrease. It simply costs a company more money to pay the employees more which will decrease their profits. Companies won’t give up their profits because they can raise the price of their good or service to make up the difference. And before I receive any criticism for the enormous profits some mega corporations and borderline monopolies make, profits are good for the economy and business. It allows businesses to reinvest in other companies which can decrease unemployment and grow the economy, and the profits allow a company to expand and grow market share, hire more employees, pay skilled employees more, and invest into new R&D. Profits are good and taking them away or taxing them is immoral and bad economics.
In addition, minimum wage laws violate property rights. If you own a company, you should be allowed to do whatever you want with it as long as it doesn’t violate the property rights of others. Your body and the physical things you own like an Xbox or land and your property and coercion to take away property through the government when no rights have been violated is immoral. I should also be allowed to work for whatever pay I want to. A minimum wage violates the property rights of my body. The services my body provides are worth whatever I think and a employer/customer think.
Finally, part of the reason wages don’t seem to be enough due to inflation which is the fault of the Federal Reserve Bank of the United States.
So to sum up an increase in the minimum wage:
1. Increases cost of goods or services
2. Increases unemployment
3. Costs taxpayers more
4. Slows economy and can run smaller businesses out of business because only large companies can absorb the costs. So it kills Mom and Pop shops and benefits large corporations like McDonalds who can manage to pay their employees more
5. Decreases profits which is bad for a company and increases unemployment and societal advancement
6 . Minimum wage violates property rights. People should be allowed to work for however much they want and employers should be able to pay whatever they want. Best of all, it is all voluntary and the employees wage is determined and accepted by both parties.