There is comfort in such solutions because emotion rules the argument rather than reason. The emotionally driven argument counts intentions more than results. It also assumes that anyone who thinks differently must have "wrong" intentions. When the poor end up worse off there will always be, of course, the "evil companies" and "greedy rich people" here to blame again. Totalitarian governments have found blaming to always be easier than reasoning and takes much less time as well (Orwell hit on this point in his famous work). Why examine what actually happens when we can all agree quickly who the evil doers are? Even if these "evil intentions" are falsely assigned we can still all agree they are evil!
One could look to a nation with the lowest unemployment rate in the world just to see what minimum wage law might exist and compare it to the minimum wage law of our country. A nation with the consistently (year over year) lowest unemployment rate in the world (between 1.8% to 3% over the last 5 years) also is a nation with no minimum wage law! In fact a minimum wage law put to referendum in May of 2014 was overwhelmingly rejected by 76% of the voters in that country. Could this mean that there is a large underpaid working class of impoverished persons in this country? In fact the answer to this question is "no". Instead, surprisingly, we find that the country of Switzerland is among the richest in the world with one of the highest average incomes and lowest of poverty rates. Facts like these fails to resonate with the emotional argument so it must (and surely will) be dismissed for all sorts of creative reasons. Worst of all it could mean the government (like ours) makes things worse for the poor despite the intentions and that truly flies in the face of the big government-business faith!
One might look at the impact of the minimum wage on the workforce in our nation and for the patterns found between states (there are different minimum wages from state to state). What proportion of workers actually make the minimum wage and would be impacted? If we pass a law that mandates a higher minimum wage what impact does it have when comparing states? According to U.S. Labor Bureau statistics those making minimum wage are less than 5% of the working population and most of these positions employ teenagers and entry level workers. In states raising the pay of these workers by force of law (according to the U.S. Labor Bureau statistics from 1990-2013) there were sustained increases in teenage unemployment and less entry level positions to those seeking first time employment. The people meant to be helped are shut out of any employment at all. The long term impact of shutting the door on these entry level workers could be contributing to the growing non-participation rate by able bodied individuals who have given up on work altogether (and are not even counted as unemployed by the government). So forcibly raising minimum wage (by law in different states) reduces lifetime earnings of workers and denies entry level positions to those who desperately desire them. None of this reality matters to those who believe that "laws always help" because, even if predictable as an outcome, those who consider themselves as trying to "help" will blame the people and companies who decide in marginal situations "not to hire" as "greedy and wrong" (even if those blaming appear not to be hiring themselves.)
Finally there is the relationship between the employer and the employee that is altered. The employee earning minimum wage has an allegiance to the government that he thinks is providing the minimum wage and is grateful to the government for "saving him from lower wages" (even if it is the employing firm who is actually supplying the wage!) If the worker were more focused on being grateful and working hard for the company then greater company earnings could result. The worker efforts and positive attitude would help the bottom line of the company and the future of that worker. When a government steps in to dictate compensation the loyalty and effort which might be mutually experienced by company and employee is lost. The government is like a "thug" in your "corner" helping you get the most you can for yourself. This reliance on your "thug friend" substitutes for working to make your company more successful so that you can be a part of the success. The relationship of mutual caring is now lost. The mere presence of the thug empowers a negative attitude and hinders the possible advancement of that employee (in both attitude and compensation).
One huge benefit to the minimum wage worker would most certainly be to allow and ease the starting one's own business. If individuals could start a business as easily as getting a job there would be an increase and upward pressure on wages (because these workers are not available for hire!) Unfortunately the burden of regulations, laws, codes and complicated tax structures penalize AND deter the formation of small businesses. The small businesses have no lobbyists or built in political clout that protects them.
One might look at the impact of the minimum wage on the workforce in our nation and for the patterns found between states (there are different minimum wages from state to state). What proportion of workers actually make the minimum wage and would be impacted? If we pass a law that mandates a higher minimum wage what impact does it have when comparing states? According to U.S. Labor Bureau statistics those making minimum wage are less than 5% of the working population and most of these positions employ teenagers and entry level workers. In states raising the pay of these workers by force of law (according to the U.S. Labor Bureau statistics from 1990-2013) there were sustained increases in teenage unemployment and less entry level positions to those seeking first time employment. The people meant to be helped are shut out of any employment at all. The long term impact of shutting the door on these entry level workers could be contributing to the growing non-participation rate by able bodied individuals who have given up on work altogether (and are not even counted as unemployed by the government). So forcibly raising minimum wage (by law in different states) reduces lifetime earnings of workers and denies entry level positions to those who desperately desire them. None of this reality matters to those who believe that "laws always help" because, even if predictable as an outcome, those who consider themselves as trying to "help" will blame the people and companies who decide in marginal situations "not to hire" as "greedy and wrong" (even if those blaming appear not to be hiring themselves.)
Finally there is the relationship between the employer and the employee that is altered. The employee earning minimum wage has an allegiance to the government that he thinks is providing the minimum wage and is grateful to the government for "saving him from lower wages" (even if it is the employing firm who is actually supplying the wage!) If the worker were more focused on being grateful and working hard for the company then greater company earnings could result. The worker efforts and positive attitude would help the bottom line of the company and the future of that worker. When a government steps in to dictate compensation the loyalty and effort which might be mutually experienced by company and employee is lost. The government is like a "thug" in your "corner" helping you get the most you can for yourself. This reliance on your "thug friend" substitutes for working to make your company more successful so that you can be a part of the success. The relationship of mutual caring is now lost. The mere presence of the thug empowers a negative attitude and hinders the possible advancement of that employee (in both attitude and compensation).
There are some who intuitively realize the principles at work (as depicted in the video below). They recognize that economic activity is, in fact, actually suppressed by big government. Who benefits from the suppression of economic activity? The poor do not benefit form such suppression. Laws passed may be meant to help but they fail to do so time and time and time again. In the tradition of Frederick Douglass this video clip appears to show some of the awakened (and make an important point about minimum wage):
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One huge benefit to the minimum wage worker would most certainly be to allow and ease the starting one's own business. If individuals could start a business as easily as getting a job there would be an increase and upward pressure on wages (because these workers are not available for hire!) Unfortunately the burden of regulations, laws, codes and complicated tax structures penalize AND deter the formation of small businesses. The small businesses have no lobbyists or built in political clout that protects them.
The problem with a government mandate justified by intention has two wrong folds. First is the wrong idea that those who want a higher "minimum wage" naturally define those who "truly" care (while those who disagree "truly do not care"?) The fact that data does provide evidence that minimum wage laws can reduce opportunities and increase suffering for the poorest and most vulnerable (unskilled workers) is exactly the opposite of intended consequences. The tragic result caused by imposed increases in minimum wage is unskilled unemployment increase, government dependence increase, average income decline and the poorest of all workers (the unskilled youthful employee) is hurt over a lifetime by a delayed entry into the workforce.
The young worker is also strategically wounded by an adversarial relationship with the employer, tactically crippled with increased unemployment now (forcing dependence on government) and then must carry long periods of unemployment on the life long resume. Those who wanted the easy "solution" of forcibly increasing the minimum wage will fall back on "we meant to help the downtrodden" and "the one's causing the decrease opportunities are the greedy rich and the evil companies." The paradox, of course, is that the greedy rich people are the one's who employ the workers and PAY them. A government that claims to be giving the worker a minimum wage is merely a thug forcing the employer to pay the wage and this is not lost on the worker. So the conscience is salved by "intent" even if the results guarantee another round of blame and decline in opportunity rather than a much needed round of opportunity and enrichment.
If only we could get past the intentions.
The young worker is also strategically wounded by an adversarial relationship with the employer, tactically crippled with increased unemployment now (forcing dependence on government) and then must carry long periods of unemployment on the life long resume. Those who wanted the easy "solution" of forcibly increasing the minimum wage will fall back on "we meant to help the downtrodden" and "the one's causing the decrease opportunities are the greedy rich and the evil companies." The paradox, of course, is that the greedy rich people are the one's who employ the workers and PAY them. A government that claims to be giving the worker a minimum wage is merely a thug forcing the employer to pay the wage and this is not lost on the worker. So the conscience is salved by "intent" even if the results guarantee another round of blame and decline in opportunity rather than a much needed round of opportunity and enrichment.
If only we could get past the intentions.
