Rebirth of Reason


Why There Should Be No Minimum Wage
by Wesley Bronez

The federal government set the first minimum wage in 1938 to $.25 per hour. Since then, it has been raised to $5.15 per hour and still it continues to rise. Some people would tell you that the minimum wage is good, and “It should be raised if anything” is a very typical statement among supporters.

Democrat John Kerry, who lost the 2004 election to Republican George Walker Bush, supports a higher minimum wage. He has a goal of at least $7 an hour by the year 2007.

Despite that raising the minimum wage is supported by 86% of the United States’ population, the minimum wage should actually be completely eliminated. Americans supporting the minimum wage seem to have the general impression that a higher minimum wage means a higher pay for people at the same jobs. In other words, they think that, if Kerry accomplishes his goal, everyone who is now making $5.15 an hour would suddenly be paid $7 an hour without any change in the type of work, their qualification, or the quality of the work they do, but do not consider the consequences of raising the minimum wage.

A higher minimum wage doesn’t improve jobs – it eliminates them. People whom corporations are willing to pay only $5.15 an hour would not suddenly be paid $7 an hour... rather, they would be fired and replaced with people whom the corporation is willing to pay $7. Companies would find workers who are more efficient and worth paying the new minimum wage, and with more efficient workers, the companies would end up needing fewer workers. More and more companies would begin replacing people with robots as they became cheaper than people for more and more jobs. Many companies would start hiring workers in other countries where they would be able to find cheaper labor. Workers with lower skill levels would no longer be able to find jobs.

People who are worth less than $7 to companies would be fired, and those who are worth more than $7 would not be affected. No one benefits from a higher minimum wage. Everyone is either hurt by it or not affected.

If this still doesn’t convince you, let’s use a more extreme example. Say the federal government raised the minimum wage to $100 an hour. Great news! Now those college students working at McDonald’s can get rich saying, “Would you like fries with that?” Only one problem. Those college students would be completely out of a job! Why would McDonald’s pay many employees $100 an hour when McDonald’s already has the technology to take orders and make food electronically? This new method would allow them to hire only one person per store for maintenance purposes... until technology gets so good that even they are no longer needed, and even before that, this person would have to be highly trained.

There are about 10.5 million unemployed Americans currently looking for jobs. With the minimum wage gone, there would be more available jobs and these Americans could get less than $5.15 an hour rather than their current $0 an hour.

The goal of the minimum wage is to help American workers. Unfortunately and ironically, it does just the opposite, and therefore should be eliminated.
Sanctions: 18Sanctions: 18Sanctions: 18 Sanction this ArticleEditMark as your favorite article

Discuss this Article (131 messages)