When the government insists that employers pay a certain amount per hour, it restricts both the employers, and the people who are seeking employment.
If an employer has to pay $10.00 per hour for any employee, what happens to the person who is not skilled enough to make that much? What happens to the person is not worth that much? Like the high school student who wants to work a part-time job during the summer to help pay for movie tickets. What can they do when nobody wants to pay them the required minimum wage? As an employer, if you could get an inexperienced 17 year old to flip burgers for $10.00 an hour or a veteran burger flipper for the same, who do you pick? It just so happens that it is becoming harder and harder for inexperienced young adults to find someone who can afford to pay them.
If you have the budget to hire 5 people at $10.00 an hour you have the budget to hire 6 people at $7.00 an hour and save money. What does that mean? It means one more person gets a job and you can lower prices without hurting your bottom line. It's always a good thing to have lower prices.
Now imagine that you run a business and you have exactly enough in your budget to employ five people at $10.00 per hour. What do you do when the government raises the minimum wage? Your options are pretty limited. You can raise prices letting the consumers pay the extra cost, you can terminate an employee, or you can take a loss on the bottom line of your business. No business owner wants to do any of these things, but if the government forces you to do it... you probably end up raising prices of your product/service or terminating an employee to pay for the new cost of employing the other four. The four employees that are left are happy now, because they got a free pay raise! Thanks government! But... remember those raised prices that affect the consumer? Everybody is a consumer. Now you have four employed people who are paying higher prices for everything they do (since you're not the only employer out there who does this), and one unemployed person who couldn't even afford the old prices, and especially can't afford the new ones.
That unemployed person now has to seek help from any source they can find it. Fortunately for them, the government that put them out of work is willing to help. And they have the money to do it, because they can tax the business owners and their employees (the ones that still have jobs) in order to do so. Government has mastered the art of breaking a leg and supplying a crutch to walk on.
People who advocate raising minimum wage are actually advocating that prices get raised and/or someone else loses their job. Seems kind of counterproductive, doesn't it? Somehow they never realize that they are the ones who eventually pay the cost in raised prices, and sometimes they're the ones who lose their job.
A government enforced minimum wage hurts the employer, the employee, and the consumer. Removing it benefits the employee, the employer, and the consumer. Seems like a no-brainer to me. We need to get rid of this widely accepted practice of government market regulation. An Austrian free market solution is the answer.
That's the way I see it.
If an employer has to pay $10.00 per hour for any employee, what happens to the person who is not skilled enough to make that much? What happens to the person is not worth that much? Like the high school student who wants to work a part-time job during the summer to help pay for movie tickets. What can they do when nobody wants to pay them the required minimum wage? As an employer, if you could get an inexperienced 17 year old to flip burgers for $10.00 an hour or a veteran burger flipper for the same, who do you pick? It just so happens that it is becoming harder and harder for inexperienced young adults to find someone who can afford to pay them.
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| He must be paying for his teen's movie tickets. |
Now imagine that you run a business and you have exactly enough in your budget to employ five people at $10.00 per hour. What do you do when the government raises the minimum wage? Your options are pretty limited. You can raise prices letting the consumers pay the extra cost, you can terminate an employee, or you can take a loss on the bottom line of your business. No business owner wants to do any of these things, but if the government forces you to do it... you probably end up raising prices of your product/service or terminating an employee to pay for the new cost of employing the other four. The four employees that are left are happy now, because they got a free pay raise! Thanks government! But... remember those raised prices that affect the consumer? Everybody is a consumer. Now you have four employed people who are paying higher prices for everything they do (since you're not the only employer out there who does this), and one unemployed person who couldn't even afford the old prices, and especially can't afford the new ones.
That unemployed person now has to seek help from any source they can find it. Fortunately for them, the government that put them out of work is willing to help. And they have the money to do it, because they can tax the business owners and their employees (the ones that still have jobs) in order to do so. Government has mastered the art of breaking a leg and supplying a crutch to walk on.
People who advocate raising minimum wage are actually advocating that prices get raised and/or someone else loses their job. Seems kind of counterproductive, doesn't it? Somehow they never realize that they are the ones who eventually pay the cost in raised prices, and sometimes they're the ones who lose their job.
A government enforced minimum wage hurts the employer, the employee, and the consumer. Removing it benefits the employee, the employer, and the consumer. Seems like a no-brainer to me. We need to get rid of this widely accepted practice of government market regulation. An Austrian free market solution is the answer.
That's the way I see it.
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