Several news reports indicate protests are taking place across the country over the minimum wage, with Lansing and Detroit intending to host their own, according to MLive.com. There are a number of problems with governments' wage floors.
Minimum wage laws:
- Do more harm than good.
The only true minimum wage is zero, which is what many workers may get after imposing this floor on pay. Price theory tells us that there is an inverse relationship between the price and quantity demanded of just about anything. Raise the price of workers and fewer will be demanded.
- Deprive people of invaluable work experience.
Minimum wage jobs often are the entry point to the world of work. Removing the first steps on a ladder to higher wages and more challenging jobs hurts people, particularly the young and inexperienced.
- Are unfair.
If someone is willing to take less than is mandated to work at any job it is unfair of others to interfere in that peaceful transaction.
What keeps pay above the minimum wage today from falling to the minimum wage? The market. The market determines on its own that many Americans are worth in terms of salary based on many variables, among them supply and demand for a particular service.
Supporters of minimum wage laws are well intentioned, but the results can be harmful.