#5. Minimum Wage… Because You’re Too Stupid To Bargain For Yourself!
The minimum wage is one of the biggest economic blunders for governments to engage in, unless you’re a politician trying to get elected of course. Proponents of the minimum wage argue that entry level and unskilled workers are too stupid or ineffective at bargaining for a fair wage, so the government should demand that employers pay what they deem a “fair price.”
Politicians argue that employers will collude to try and keep the prices of their entry level workers low. But if that were the case, how come hospitals don’t collude to keep the the salaries of brain surgeons down? That’s because of competition.
When the government steps in to create a minimum wage at $5 an hour, they’re killing all the jobs that might have occurred at $4 an hour. As prices for labor go up and up and up, the number of jobs that can be created go down and down and down. Companies are often forced to lay off workers who are unskilled, because their productive labor is not worth what the government is demanding that employers pay them. Yes, being forced to take a pay cut can be harsh, but far worse is losing your job if the employer simply can’t make it work.