Why Minimum Wage Laws Should Be killed – Part 2

This is really more of an update to my minimum wage law post than a part 2. I want to thank everyone for weighing in with their views. It was extremely refreshing to see that most agree with me than disagree. What I want to do with this post is touch on two other issues about minimum wage in general.

The Minimum Wage Is Not a Working Wage

Advocates of minimum wage laws always say the minimum wage should be increased to bring up the living standards of low income families. When the NDP was in power they tried to raised the minimum wage to $10 an hour from $6. I always wonder how they came up with $10 an hour. Why not $15 an hour, or $20 an hour? You want to give everyone a nice standard of living, right? Let’s raise the minimum wage to $40 an hour! I think we all know why this won’t work. BC’s current minimum wage is $8 an hour. If you weren’t making it at $6 an hour, chances are you’re not going to be making it at $8 an hour. The minimum wage was never meant to be a working wage.

Most minimum wage earners are young people. Seventy percent are between the ages of 16 to 23 and 78% live at home with their parents (source: Stats Canada). This was my situation when I was making minimum wage. My first job was at MacDonald’s. I lasted four hours before I quit. I concluded there was no way anyone can live on minimum wage but I didn’t bother looking for a higher paying job. Why? Because I was 15 years old, lived at home for free and didn’t have to live on minimum wage. As a matter of fact, I didn’t have to live on any wage!

Most Minimum Wage Workers Are Not Poor

One of the biggest misconception is thinking minimum wage workers are poor. Most low-paid workers are not from low-income families. The majority are from middle class families – the husband and wife have good paying jobs and their kids make minimum wage working at MacDonald’s (unless they quit in four hours). That is the typical minimum wage worker. Any increases in the minimum wage are unlikely to trickle down to low-income households.

The benefits of a higher minimum wage accrue largely to teenagers living in relatively affluent households. For most minimum wage earners, a higher minimum wage means they can spend more on cloths instead of putting more food on the table. Furthermore, to the extent that higher minimum wages raise the price of goods that poorer families tend to consume, increases in the minimum wage have a perverse impact on the distribution of real income across households.

As a society, we need to do our part to help poor and low-income families. However, higher minimum wages are unlikely to raise the incomes of the poor. Rather, they are likely to reduce employment opportunities for the unskilled and raise the income of certain low-wage workers who do not necessarily come from low-income families.


71 thoughts on “Why Minimum Wage Laws Should Be killed – Part 2”

  1. Hey John, yeah minimum wage is horrible

    Hey I just added you to my technorati favorites. Can you please add me and if you want to increase your Technorati Fave Count check out my FaveMe UP Trainstation.

    http://www.cashforcomments.com/faveme-up/

    1. It seems like a trickling cycle of inflation though. In Southern California. The idea of minimum wage is good for the poor. Because the cost of living is so high. To have a studio in Southern California you would expect to pay 900-1000 now. To share a 2 bedroom apt it would range from 600-700.

      So I think it depends on different locations.

      1. Michael Kwan says:

        Nice replying to your own comment there. And I seriously doubt John needs any help in increasing his Technorati fave count. 😛

        Back on topic. Nice points John. Absolutely, if you’re trying to achieve a certain standard of living based on a minimum job alone, you’re not going to make it. It was never intended to serve that purpose.

        1. No no no! Don’t kill minimum wage! If I don’t succeed in blogging, I’ll have to go for minimum wage!

          If you want to see my daily progression:
          BlogaDollar.com
          Greetings from France John.

          P.S I was just kidding. I’ll succeed in blogging. Never let go!

      2. John Chow says:

        You seem to have missed the point. Most people on minimum wage are not poor.

        1. john has gone political

          1. mason says:

            wait i thought john was evil… him going political would only lead to bad things!!! 😈

        2. Yes, I don’t think they are poor, but they are surely in debt. People try to live big then they are. Consumer culture in the states is an epidemic. Where most people who live here are slaving away against their own debt. When people do get a raise or if the minimum wage increases they actually don’t have more money, b/c the mentality is to spend more.

  2. Yeoq says:

    i couldn’t agree with you more, a minimum wage definately raises the opportunity cost of staying in school. Then you got this people walking around with minimum education.If the respective teenage dropouts only knew that they are likely to be unemployed because of the higher minimum wage anyhow, let me not get technical who am i to say? nice post John Chow. SEO just earned you a new reader! 😐

  3. Shaun Carter says:

    The minimum wage law is all messed up. As a former employer I can tell you the statistic you posted regarding the percentage of minimum wage earners being kids and/or an adult’s second job is right on the money.

    I couldn’t stand paying an ever increasing minimum wage here in Michigan to people who would happily work for less and who live at home with their parents and have no expenses. But on the other hand the overzealous spending of these teenage minimum wagers keeps the economy buzzing along.

    1. Marc says:

      You don’t know what you’re talking about. What worker would happily work for less in any situation? What an ignorant comment! Dumbass, that contradicts a basic assumption of all economic models… rational self interest.

      Ever increasing minimum wage? You look like you’re 12. This is the first minimum wage hike in 10 years in the U.S. What the hell are you talking about? Hope you have better luck with your thin affiliate credit card site than you did as an employer…lol

      This whole topic just shows the brainwashing job that Chicago School has pulled on the public by sweeping market externalisites under the rug.

      @John. You’re just plain wrong my friend.

      1. Marc says:

        Imposter! 🙂

      2. Shaun Carter says:

        What planet are you living on? I had 9 out of 10 of my student employees tell me they didn’t mind working for the wage of $5.50 an hour when it was raised to $7.15. I also referred to the fact that I live in MICHIGAN which has been increasing the minimum wage ANNUALLY for several years not the federal minimum wage hike.

        As for people happily working for less I was referring to the vast majority of minimum wage employees who are students and don’t depend on the income because their mommy and daddy pay for everything. In Michigan students are struggling to find jobs at all because of the high rate of unemployment. If anything, my comment had more economic rationale than yours. All my employees were paid minimum wage and my annual employee turnover was less than 10%. It’s called creating a good work environment and respecting people. I also had a file folder filled with applications…

        And my credit card site makes me a comfortable living, so go find someone else to pick on and accuse of being ignorant.

  4. DBogs says:

    Where are you living? Just curious because I know people well over 30 that have to work 2 or 3 minimum wage jobs to support a family. I guess it really depends on where you live. Not everyone has a college education either.(And even a college education doesn’t guarantee more than minimum wage in some areas!) So that does account for the need for standards. Have you looked at how many over 45 people have been ‘retired’ at an old job but still have to work because they aren’t eligible for SS? (If they ever receive SS, the chances of these people needing an outside income to help pay for bills is still very high. SS is not the Godsend everyone seems to think it is!) These people are shoved into the minimum wage jobs simply because of their age. No one wants to hire people over 40! Now you may think that they get help from the government….but they don’t. The wages they make at these ‘posh’ jobs don’t even start to pay for their upkeep (medications, car insurance, health insurance not to mention keeping the household going.) Maybe the minimum wage should be reformed to state that there isn’t any minimum wage for teens! When teens refuse to work for less then these people who are simply trying to survive can pick up another 2 or 3 of these jobs to try to make ends meet. (Yes…a wee bit of sarcasm there!)

    The country as a whole cannot depend on companies to pay a decent wage. All they are looking at is the ‘bottom line.’ If they could get people to work for a penny a day, they would. A mandated minimum wage is the only thing that keeps some families afloat. (Barely I might add but the alternative is even more dismal!)

    I agree there has to be a better way but so far no one has fixed what ails the whole system. Taking Welfare away was the only answer politicians could come up with….their cure for what ails low income families. But what it really did was put more and more people in minimum wage jobs. (Anything that is below $6.00 I consider minimum wage. Feds only require $5.45 right?)

    So until someone comes up with a viable….a real working model……solution to get these families in better paying jobs, minimum wage should remain.

  5. G says:

    Have you been to a McDonald’s lately? The teenage students have long ago been replaced by middle-aged poor immigrants.

    I’m as Ayn-Rand-capitalist as they come, but I support the minimum living wage. I want to live in a society where entrepreneurs like myself can pay employees more and more by increasing their productivity. I don’t want a society where “businesses” rely on lowering wages to produce a temporary profit. Removing the minimum wage would start a race to the bottom.

    1. Freebies says:

      I have to agree, my local Taco Bell has about three teenagers in it. The rest of middle-aged folk who look about as happy to be working there as I would look if I’d just eaten at Taco Bell.

  6. Here in Thailand they have minimum wage rules, but not many companies adhere to them. A few of my students work at companies like 7-11 etc. and they only earn 20 Baht an hour (Roughly 60 US cents) 😯

  7. Mat says:

    To those who think John is wrong.

    John’s understanding of economics, money and the marketplace is the KEY to why is he so successful.

    He has just demonstrated a wonderful understanding of marketplace economics.

    If you disagree with him chances are you would disagree with him on most other economics issues as well.

    John’s approach to money is why he is successful today. I would advise you be careful not to dismiss his mindset so flippantly.

    1. Marc says:

      While I was arguing against him in his last thread, it was on a social basis and certainly wasn’t flippant.

      If it is true that almost all minimum wage workers are teenagers generating supplemental income for themselves, then this all makes a lots of sense. I don’t have any stats on that kind of thing. I’d certainly be interested in seeing some.

    2. Jason says:

      I think this doesn’t apply. Yes, John is successful. But you can’t just dismiss all of the discussion for that reason alone. Some people grew up poor, some middle-class, and others well off, which is why the topic created so much controversy.

    3. Freebies says:

      No offense, but agreeing with somebody solely because they’ve had past (and still present) success is pretty foolish. 🙂 This goes for any field, not just economics.

  8. ian says:

    John, you make one mass generalisation, I think you are way off the mark. You should watch a documentary called “The American Ruling Class”
    Just cause you dont see the poverty and hardship, doesnt mean it doesnt exist.
    http://www.youtube.com/watch?v=gDgFiW2xtf0&eurl=
    It may not be apparent in Canada or Australia for that matter, but whilst there is a lot of wealth in America, there are a lot of people doing it really tough. A minimum wage goes some small way from preventing them from being ruthlessly exploited.

  9. Wild Bill says:

    John you are right on the money as usual. Marc and Ian are clueless on the real effects of minimum wage laws. The $1 menu at McDonald’s will be the $1.50 menu then the $2 menu in no time.

    I once applied for a job at a radio station here in Oklahoma. I told them I would work for free. (Yes I said free!) I wanted to get experience in the radio industry. They told me they could not hire me and pay me nothing because of minimum wage laws and they could not afford to hire me at their company at that time. I was told by the program director he would hire me in a heartbeat (as I was the only person that had ever asked to be paid nothing.)

    Minimum wage laws kept me from getting a job that I would have gladly done for free. I’m still hoping to get hired on when a paid position opens up, but I could have been working in the radio industry and had a year of experience under my belt by now if not for government interference. ❓

    1. ian says:

      There are tonnes of community run non profit radio stations where you could have gotten free non paid work experience. How did all of the other people get paid work at the radio station, yep, based on their merit, hey if you cant get a job based on merit and want to work for free, dont blame the system. Had the radio station hired you for free, all the talented and qualified individuals who had worked and studied hard would have had their chance ruined thanks to you. What if you eventually got a paid job at the radio station and some other people come along and offer to work for free, and they decide to terminate your employment and have people do your job for free or next to nothing?
      I live in a country where there are minimum wage laws, where there is free medical care for everyone, it is a wonderful country, yes for those who consider greed to be good, i can understand how one would consider having a social conscience as being clueless.

  10. Joshua says:

    John, this is a perfect example of the government doing something that actually has no positive impact on the very thing they claim to ‘do something’ about. It happens all the time.

    I’m really glad you chose to focus on this topic once again!

    1. I like these posts too. Perhaps some more economics related posts on this blog would be a good idea 🙂

      1. EK says:

        I guess I’ll take the opposite position — John’s opinions are dangerous because so many people seem to look up to him.

        I would prefer if he kept talking about his online business ventures (as he is very knowledgeable in this area) as opposed to discussing economic issues of which he doesn’t have a full understandings of.

        1. Joshua says:

          Are you kidding?

          John’s opinion is as valid as anyone else’s.

          You’d rather listen to a bunch of supposed experts babble on about the subject?

          ‘Regular’ people have the ability to understand and make choices for themselves.

          It doesn’t always require any special knowledge to know what is good for you or someone you care about.

  11. Hawaii SEO says:

    Hmmm… I was living on minimum wage or just slightly above it until after I was out of college.

    And Noooo… I was not living with the folks. I needed to work two jobs to pay the rent while going to school full time.

    Sometimes I would go three days without sleeping. I remember hallucinating from time to time because I went so long without sleep. (I thought the wall was falling on me or I would reach for something that wasn’t there or I would see things like patterns moving on the wall, etc)

    Time was sooo short… I usually only had short periods of time, like an hour or two between school and the jobs. I could sometimes only do one of three things with my free hour… I could either eat, sleep or bathe. (Sometimes I went several days without bathing – Yikes!)

    On Fridays, I would work a tipple shift so I could have the next day off. I would work after school until 9:00 at night, go to my other job and work from 10:00 at night until 8:00 in the morning and then back to the other job at 8:30 until 5:00. (If you include school, it was 28 Hours)

    I did that for about three years. Looking back, I have no idea how I was able to maintain that kind of work schedule for so long.

  12. Guk says:

    In my opinion, if you raise the minimum wage, all other products will go up in price making it hard for everyone to buy those products. Why? Increase in minimum wage is increase in cost of production. Therefore, since most companies are here to make money (profit), they raise their prices.

    As a result, everyone stays poor as always.

  13. Csimon says:

    👿 Yeah. What you earn is not as important as what you do with the money. Some people earn big salary but still not enough. Why? they don’t know how to manage their money. What you do with the money is more important. You you waste them it your fault. 👿

  14. Csimon says:

    Money doesn’t make you rich. Money has the power to make you rich and poor if you mis manage it.

    http://csgonsilou.blogspot.com

  15. HMTKSteve says:

    I said it before and I’ll say it again:

    “Minimum wage has never been intended to be a living wage.”

    Stop confusing the two! If you are older than 25 and working at minimum wage than there is something wrong with YOU!

    Why are you still working a shit job? Those jobs are for teenagers not heads of households. You must lack the ambition and the drive to succeed in life.

  16. HMTKSteve says:

    In some ways my work experience is like Johns except that I stuck in longer than four hours!

    My first job was going door-to-door and hanging flyers for Dominoes Pizza. My second job was picking up golf balls on a driving range. Both of those were minimum wage jobs.

    In High School I worked at a discount store and was told I could jump up to management as soon as I graduated, I chose not too. Instead I went to work for a big print shop in South Boston. I stayed there for a year and then joined the army. After leaving the army I took a job with a telco, where I still am today.

    My skills and experience got me my current job and it pays far more than minimum wage. No one handed me this job, I earned it.

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  18. I do think John is right, having come from a poorer family myself and utilizing things that are made available to better myself like low interest federally subsidized student loans, local state grants, etc. Um hello, get that education, work part time at an easy job like McD’s or telemarketing or something and go to college. The minimum wage does have it’s affect on the poorer people in this nation, the ones that didn’t get an education, finish high school or for whatever reason are waitresses and cashiers at 53.

    That’s not the majority of minimum wage earners. They are indeed teenagers and young adults. This country offers more than enough assistance to all of its’ poorer citizens in order to better themselves, you DO have to work for it, but that’s the American Way. Your success in life really is up to you and you alone.

    1. Marc says:

      Get a clue please. When my high paying highly technical job went offshore because it could be done at a cost of less than U.S. minimum wage that proved to me in hard cold reality, that education is no more important than a strong back.

      If you are a lawyer, a doctor, an engineer, an architect, a programmer, whatever. You’re job can be sent offshore for less than minimum wage.

      Why don’t you wake up from your 1950’s era dream and smell the global coffee.

      1. Marc says:

        Luckily for Americans, they are unable to offshore the Wal-Mart greeter position. Seems like minimum wage is all we’ll have left.

  19. suthan says:

    I support paying a minimum wage.. i came from a poor family, and even worse, both my parents were uneducated..

    the misery of going through life then, is something that you would not know..

    paying a minimum wage will defiantely help the poor , and will guarantee protection for wage earners..

    yours truly,
    http://whygossip.blogspot.com

    p/s- i am still studying, and internet is my only source of income.. but i belive the goings will get better one day

  20. It has shown that in states where the state took initiative to raise minimum wage over the federal minimum wage that their economies have gotten stronger.

  21. bweaver says:

    Another great post, John. Beyond the simple political pandering and bad economics on which the MW is based, there are ripple effects of driving the MW up. Some regulations and laws are based on multiples of the MW, so the negative effects are felt by businesses at various levels, not just near the bottom wages.

    -bill / bweaver.net

  22. TheWeeJenny says:

    What I’d like to know is, just who exactly says that most folks who make minimum wage aren’t poor? Because I sure as hell was poor when I made minimum wage, and I wasn’t a teenager living at home either. I was a reasonably educated adult in a town that had no use for educated people, and suffering from post-traumatic stress because of a domestic abuse situation that I’d escaped (and it was a family member, not a spouse, not someone I had a choice about being acquainted with).

    I really think that before you can make any sort of informed statement about minimum wage, you have to try living on it. REALLY living on it. No car, accepting handouts from family, because if you didn’t you wouldn’t eat every day. Freezing in a basement suite underneath people that don’t turn the heat on unless it’s below 35 outside (which happens in Alberta occasionally) because they’re also poor and trying to save money. All of this because you were temporarily unfortunate, and in my case born into the wrong family.

    Yes I made it out, under my own power, and I did it through sheer determination, and no, a couple extra dollars a month wouldn’t have fixed everything. What it would have done is given me a tiny bit of much needed breathing space. After 2 years at the job I’d gotten one single 50 cent raise, because they weren’t required to pay me more than that. And my boss had to really, really push the owners to get me that raise too. I couldn’t leave, because there really wasn’t anything else in that small town that would have paid me any more.

    You’re dreaming if you think that employers will pay decent wages in order to make it easier to find employees willing to work for them, without being legally required to do so. If they can pay less they will, because there’s always someone desperate enough to work 2 or 3 jobs for low wages, and for more reasons than I think you can possibly think of, because all your limited imaginations can come up with is “there must be something wrong with you”.

    I’m appalled at the ignorance I’m seeing here. I used to think Vancouver was a nice place to live where one was less likely to be judged (than Alberta where I grew up), but it looks like it’s acutally a place where they only accept you if you’re rich. If you’re not, then you’re defective somehow.

    Shame on you all. You’re emblematic of all the things that have changed for the worse in this Province. You make the rednecks in Alberta that I grew up with look enlightened and compassionate and liberal by comparison. Not a single one of you has been at the mercy of the system, and I pray you never will be, because it’s truly miserable.

    News Flash: Having money does not make you awesome. Therefore, not having money does not make you not-awesome. Get over it.

    1. Simon says:

      I think that many of the things stated in this article are meaningless, because the minimum wage should be aimed at those who really need it, not the people who live at home with their parents. The fact that they benefit from it is not evidence to suggest that the minimum wage is not needed. It’s not ideal, it may even reduce efficiency, but again, none of that means minimum earning standards are not required.

      Most people are not victims of the floods over here in the UK, but who is going to argue that we shouldn’t spend money on flood defences? The economy may well be stronger spending that money elsewhere, because “most” people don’t benefit from the flood defences, but it’s still certainly required.

      I’m all for a free market economy, but I don’t believe it is possible to have an enconomy that is 100% driven by market forces, if you want to make sure that those right at the bottom of the chain aren’t spat out by the system.

      It’s also very difficult for those who aren’t directly concerned by the existence of the minimum wage to comment (including myself), since it is all too easy to take the view that it should be simple for everyone to be make their own future.

  23. Minimum wage is really an illusion, life what you make of it, period.

  24. bob cobb says:

    There defintiely needs to be a little more public education about the minimum wage. Most people act like its a huge issue, but they don’t understand the repercussions of it.

    1. Marc says:

      That is certainly true. I’ve learned more about minimum wage here than I did in my first year economics class.

  25. DBogs says:

    Some people will only learn when their job is pulled out from under them and they have to resort to the only jobs available. I wanna see what some of these same people think when they hit 35+ and the company they work for or own goes belly up. When then they are put in the same situation as many people are now days. Ambition has nothing to do with it. It’s survival and taking care of the family that will make you look at it differently…regardless of what Economics 101 taught you!

    When wealth and the bottom line becomes more important than humanity, then there is definitely something wrong with our society and the people that control it!

  26. mason says:

    I totally agree with this. No one can live on minimum wage. Even the place I work at doesn’t use minimum wage to be fair to the workers.

  27. Jason says:

    Sorry John but I think you missed the point. Unless I see statistics of who is working minimum wage in what cities I just don’t believe it. I used to work minimum wage and most of my co-workers were middle aged adults. Your article seems more opinionated rather than fact driven. And you can’t really know what it’s like living on minimum wage unless you do so. Growing up with parents as a cushion doesn’t really let you know what it feels like to be poor.

    1. Yumcha Girl says:

      I totally agree. Unless you have been there, you have no idea. John, I won’t be voting for you any time soon (but I do like your blog!).

    2. John Chow says:

      I got my stats from Statics Canada. http://www.statcan.ca/english/studies/75-001/comm/2005_09.pdf

      Here’s a piece from the stat that you may find interesting.

      “Minimum wages ranged from a high of $8.00 per hour in British Columbia to a low of $5.90 in Alberta. The latter province also had by far the lowest proportion of employees working at or below minimum wage (0.9%), while Newfoundland and Labrador had the highest (6.5%). Alberta also had one of the highest average hourly wages at $18.55 per hour and by far the lowest unemployment rate (4.6%).”

      The province with the lowest min wage has the least unemployment and the highest average pay. Think we can learn something from that.

      1. Mat says:

        They can argue all they want, but you got the stats. Nice.

      2. Marc says:

        But the one with the highest minimum wage doesn’t have the highest unemployment rate/lowest wages… Not by far. There are massive variables that aren’t taken into account with that simple example.

      3. pj says:

        Unless you have an econometric model to prove that minimum wage is a significant factor (in the statistic sense) in determining unemployment rate and/or average pay, your last sentence is wishful thinking.

        This is not to say I disagree (I agree actually), but there is no need to lower yourself to pub talk and quick conclusions here.

  28. Andrew G.R. says:

    Wow! It looks like my original e-mail to John Chow on my Minimum Wage Challenge really struck a chord with readers – and brought in even more traffic!

    You gotta love the irony.

    In any event, the dialogue here has me thinking… is the challenge even worth going through?

    My only goal was to raise awareness about the new law and pay hike. In that regard: success.

    I look forward to continued conversation and your feedback!

    http://www.jobacle.com/blog/minimum-wage-challenge-powder-keg.html

  29. Eric says:

    I think Google should pay AdSense publishers minimum wages…

    1. Nick says:

      Then people simply would not use Google Adsense.They would use something else.

      You see some people actually take charge of their life and don’t sit around crying for momma government to put food on their table, a roof over their head, and raise their kids.

  30. I think there should be a limit to minimum wage increases, but the “doom and gloom” scenarios haven’t played out in more liberal areas of the U.S.

  31. David Savage says:

    I definitely agree with you John. Most people who are working minimum wage workers are living with their parents or rooming with friends. Of course, you do have the 30 year olds with children who need the extra money, but most are married and most of the time at least one has a decent paying job.

    Another great article :mrgreen:

    1. Marc says:

      What a biased and ignorant statement. How many people over 50 do you hang out with? Why don’t you change your social set then report back?

  32. Nick says:

    Every minimum wage employer I’ve seen has advancement opportunities. If you can spell your name and tie your shoes you can become a assistant manager at a fast food restaurant, and they make around $8-$12 US.

    So it’s not like you’re stuck at minimum wage forever, unless you’re completely worthless and don’t get raises when review time comes around.

    1. Paul B says:

      Exactly, how hard is this to grasp? Most employers will pay you what you are worth to THEIR company. Payroll is the biggest expense that most companies face and is a very delicate balancing act.

      If you are only worth $3/hour in raw financial terms but the company has to pay you +$5/hour, then the company is losing money by employing you. The company is being asked to subsidise benefits or have one less employee.

      The easiest way to avoid minimum pay is to work hard and be good at what you do. Even trying a bit in school instead of screwing around all the time might help a bit. Pay rises are real people, but you have to work for them.

      And before I get slated for not knowing what it means to be poor, I grew up with sweet FA, nothing, my dad held down 4 regular jobs (with no minimum wage) and my mum 2 to pay a rent to keep a roof over our heads. I’ve seen rich people throw their lives down the bin and poor people do well so life is really all about what you make of it.

  33. Amit says:

    Hi John,

    Excellent post! You have a great understanding of basic economics. Minimize wage laws disenfranchise low skilled workers, which disproportionately hurts minorities.

    Think about it if the minimum wage is $15 like it is in Boston where I live, and you’re a low skilled worker who’s labor is only worth $10/hr, then you’re out of luck. This person have little change of getting a job where he can gain much needed job experience to qualify for that $15/hr job.

    Increases in the minimum wage force companies to hire less people or worst fire people because of increase labor costs. It happens all the time.

    Only a tiny fraction of people the US really benefit from increased minimum wage (since very few people actually live off of minimum wage), not to say all the people that are left without a job.

    If you really want to screw the poor increase the minimum wage to $30/hr (at least that is Boston to have a LIVING wage) and see what happens.

    Several countries/cities around the world have no minimum wage laws, including: Switerland, Hong Kong, Denmark, etc. It’s not surprising these countries have very low unemployment.

    1. ian says:

      “Countries like Sweden and Denmark have no formally legislated minimum wage, but the unions have been given so much power by the government that they can and do force virtually all companies to bow down and obey their command, including their minimum wages. And the minimum wage levels they impose are far higher than in the United States where the federal minimum wage is less than a third of the average pay.

      In Sweden, the union imposed minimum wages are usually twice that level.”
      Source: http://mises.org/fullstory.aspx?Id=1724

      Also according to wikipedia, http://en.wikipedia.org/wiki/Minimum_wage, all states in the United States have minimum wage laws with the exception of South Carolina, Tennessee, Alabama, Mississippi and Louisiana.
      So, if getting rid of minimum wage laws, promotes wealth and prosperity, these states must have the highest average incomes in the USA. When you check http://en.wikipedia.org/wiki/Household_income_in_the_United_States, those 5 states all are slotted in the bottom 11 spots of the table showing average incomes.

      I can see the advantages and disadvantages to both sides of the argument, I just dont think it is a clear cut black and white case of one side being right and the other side being completely wrong.

  34. Nathan Roe says:

    VERY interesting points all though i do not fully agree

  35. I think you are quite correct on this issue but I think the same cannot be said when it comes to the less developed nations.

    Over here (pls insert your country here if you dont live the US/Canada and major part of Europe) there is no such thing as minimum wage or unemployment benefits.

    😆 So for those with little or no education are way down on the totem pole and being paid, some as low as US$1 per day to make shoes for people livig in the developed countries.

    Perhaps not minimum wage but fair wage is the correct way to go.

  36. Jason says:

    I recently watched show on the ship scrapyards in India. Seeing the extreme poverty really made me value the way I live.

  37. James says:

    As a small family business owner, I’ve always been paid by salary, far under minimum if you count the hours.
    Worse than just a minimum wage increase, the majority party in my state is trying to add a 15% payroll tax (including part time) to try and take over all health insurance in the state. I see a mass exodus out of the state by any business that uses a lot of part time help.

  38. Adrienne says:

    Hi. Really great points from everyone. I’ve been studying employment issues for a few years now (and also worked low-paid and high-paid jobs in my life). I’m torn about minimum wage’s usefulness. It’s true, most people on minimum wage are not in desperate financial straits … but what about those who are? I think it’s foolish to repeal the minimum wage without a replacement strategy that can ensure vulnerable workers don’t get skewered.

    The points about people being paid “what they’re worth” (according to the market) also speaks to another interesting issue, which is the social problems inherent in relying on the market to set things like income. Instead of saying, “let the market decide, and if wages drop such that some people need to have 3 jobs for 5 years tough for them” and “3 low-paid, part-time, no-benefits jobs are better than nothing” another solution is to beef up the social safety net with paid training (in-school and on-the-job) so people, and thus society, can handle market vagaries. A number of European countries have implemented this “flexicurity” model, with great success. By success I mean high country economic competitiveness and low unemployment.
    http://www.euractiv.com/en/socialeurope/flexibility-social-security-key-employment-experts-agree/article-144592

    As to Alberta having low minimum wage but high actual wages, I think this is very, very likely due to the explosion in jobs (especially traditionally low-income ones like the service industry) from the oil boom. Because of the unusually (and, because resource-based, probably unsustainably) strong labour market there, I’d say it’s anomalous and not a good example.

    Adrienne

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