Minimum Wage Dysfunction
Pheeeeeeeew. Sometimes I get so caught up in the hubbub of Liberal economic theory that I forget that I have progressed at a different rate than others. Make no mistake that after a given period, the perpetual failure of Statism will usher the multitudes into Liberalism. I am not bold enough to say when, but I have stated that and not if, the congregation of coercion's days are numbered. This abstraction may be slightly elusive, and so I move on to the minimum wage. People still believe that it promotes the welfare of low income wage earners. While it is not my duty to remedy the incorrect thoughts of all humans, it is my duty to reach the remnant.
There are employers and employees. Employees seek to get hired by employers in the terms of either a temporary or lasting contract, under terms of mutual agreement. In an unhampered free market economy, there are no infringements upon this peaceful trade between adults. The status quo of an interventionist spirit in the United States takes the typical paternalistic route in this scenario. It assumes that the lives and property of all, are under the dominion of the State. As wards of the State, the State is the resolute arbiter of what constitutes a "fair" trade. The consent of adults is not sufficient grounds for "fairness" in the eyes of the State.
Instead an arbitrary figure is calculated and selected as appropriate for the basic expenditures that humans "need". This statistic lacks the conclusiveness of hard mathematics. It is more akin to the realm of tarot reading, ouija board playing, 8-ball shaking, Zoltan questioning idolatry. A random shot in the dark, with no target. Geometry and arithmetic, on the other hand, have unforgiving bylaws that cannot be bent by the fantastical dreams of bureaurecrats. To be a triangle, a polygon necessarily has angles whose sum is 180 degrees. The third side of a triangle cannot be less in length than the difference between the other two sides, nor can it be greater in length than the sum of the other two sides. 1 + 1 = 2. 1 x 1 = 1. The fault of the statisticians is that they believe human action is not subject to the similarly unforgiving bylaws of economics.
A and B attempt voluntary exchange. B seeks employment under A. C decides that unless they do so at the price determined by C, armed goons will be sent to incarcerate A and B. A would have hired B under terms considered without the use of force, but the price chosen by C does not suit A. B loses a chance at gainful employment. C plunders the income of A and B, in order to maintain C's monopoly business of violence.
It is not the case that every case will lead to the unemployment of B, but in a world of voluntary exchange more employment will exist than in one of compulsion. This is because the acceptance of mutual terms would not be intervened upon by a social apparatus of coercion. The sheer randomness of the State's price determination will preclude exclusion of groups that are willing to work for less wages.
Who loses the most in the status quo? Those of the lowest socio-economic status. Those with the least amount of marketable skills. They are the B's that are willing to work, but are threatened into unemployment by C. Given time and the opportunity of initial employment, they have the capability of earning inexorably rising wages. It is not capitalism that holds them back, but nearly systematic interventionism. If you care about the unemployment figures, end the minimum wage. Who would be aided by such action? Blacks, Latinos, teenagers, ex-cons, undocumented workers immediately and in due course the entire market economy.
Who wins in the status quo? Jealous special interests and politicians that get reelected by preaching this devilish (peep the etymology) doctrine as an evangel. Even their gain is but cursory. Damning the process of peaceful exchange is a piss poor policy. Interventionism, Incursionism, Invasionism, Interferencism, Infringementism, Coercionism, Compulsionism, war, statolatry, the minimum wage, call it by any name and its predicted positive effects will fail nonetheless.
Post Scriptum: The contradictions of minimum wage advocates can be seen in asking them, what price would be sufficient? If we can counteract economic law, why not have a million dollar minimum wage? Why are "interns" allowed to work for the lowest non-negative rate, $0/hr? Why can those working on stipends choose a salary below minimum wage?
If you are more of an auditory learner here are some links:
Walter "The Moderate" Block, George "Pepperdine Emeritus" Reisman, Robert "The Master" Murphy, Walter E. Williams, Milton Friedman, John Stossel, and Tom Woods with elaboration on multiple "do-gooder" policies.