Raising minimum wage would hurt workers

Raising the minimum wage is a horrible idea. The minimum wage law is not an employment law, it is an unemployment law.

Employers hire people because of a marginal productivity of labor. That means that an employee produces more revenue than he or she costs the employer in wages and benefits. When the minimum wage is arbitrarily raised, it forces that employee to produce additional revenue. To stay in business, the employer will lay off all employees who cannot produce the higher level of revenue.

Next, it does not force an employer to hire an employee at a minimum wage, it compels the employer not to hire anyone below the minimum wage. It also coerces the worker not to accept employment below the minimum wage, no matter how anxious he is to work. It obligates the worker who is faced with the choice between a low-wage job and unemployment to choose unemployment. It also eliminates the ability of an unskilled worker to enter the workforce to gain experience and increase his worth.

By eliminating entry into the workforce, the established workforce has less job competition and can therefore demand higher wages. Employers are then compelled to raise their prices.

Raising the minimum wage results in loss of jobs, higher unemployment of entry-level applicants and higher prices. All the rhetoric of needing to help the lower-paid workers is just rhetoric. In actuality, they are the ones most harmed.

Richard Webster