Economics, stripped of all the fancy language and byzantine formulations, is fairly intuitive. If the price of a product is subject to a 107% increase, will people buy more or less? An economist would say that it depends on price elasticity. Kidney dialysis would be considered price inelastic; a sharp increase in price wouldn’t affect demand much at all. Unskilled labor, on the other hand, is probably the quintessential price elastic “product”. An increase in price would lead to a drop in the demand for unskilled labor. This is the reason why the minimum wage is such a nefarious policy: it harms the very people it is intended to help.
Another very harmful effect of the minimum wage is the power it confers to employers. If they’re forced to pay a $15 wage, they’re going to be able to discriminate much more easily as to who they hire. A minimum wage effectively blocks the truly impoverished, less well-off, from ever gaining employment. A minimum wage is a form of protectionism, it’s a policy that protects all employment positions from those that desperately need employment. It’s evil, insidiously so. Many public policies seem compassionate, or morally right, at first glance, but appear wicked upon closer examination.
More on this evil from GMU Econ professor Don Boudreaux, in a letter to the New York Times.
