A businessman owns a burger restaurant. He has three employees; employee A, B, and C. Employee A is very hard working and produces 100 burgers an hour. Employee B is an okay worker and produces 75 burgers an hour. Employee C is still learning and is not very good at his job; he only produces 50 burgers an hour. If they are all earning minimum wage, and a new national standard is passed that raises wages, that will immediately put a bigger burden on the business owner. If the owner is struggling to get by, he will then have to terminate one or several of his workers, depending on the size of the wage increase. Examining the evidence above, it is very easy to conclude Employee C is most likely to lose his job. Mandating higher wages to employers may sound like a good idea for the employees but it really isn't so. Workers will be laid off, and those who remain, that is those who supposedly benefit from the wage increase will be expected to make up for the lost output by giving up their breaks and/or cutting benefits. This one distortion will result in more injustice which will inevitably lead to more protest and ultimately more government intervention.
Moreover, Employee C, who lost his job above, is the stereotypical example of who gets hurt the most by minimum wage laws. Individuals who are young or not very talented at their job are immediately passed up for employment as employers are more likely to hire more qualified workers who will be able to make up for the reduced output. Employee C very well could have been a college student, who was still learning how to work in the kitchen. He could have been working to pay his way through college as well as gaining valuable skills he can use for future employment. Employee A above did not need the government to step in and mandate a higher wage for him. The most productive of the three workers will be the most likely to get a raise or be offered a higher paying position by competitors regardless of any new legislation being passed. What raising the minimum wage would do, is eliminate the laborers who need these entry level jobs the most.
Almost every economist will agree, increasing the minimum wage is not only hurtful to the employer, but especially hurtful to lower skilled employees. New studies show over 21.6 million young Americans over the age of 18 are still living with their parents. If we want to fight back against the lack of work ethic amongst our nation's youth, and reinstitute a culture of merit and hard work, abolishing the minimum wage is a very simple fix to some of those problems.
It is not that all young people are lazy or do not want to work, in fact the opposite is true. Personally I have many friends who looked tirelessly for employment this summer and were unsuccessful in their job hunt. Small business owners that specialize in unique fields such as laser printing, paving, and architecture are not able to hire young people at the high wage rates due to the higher cost it will place on their own business. Therefore a young high school student interested in laser printing will sit at home all summer instead of learning valuable skills that will result in long term employment for himself and others in the future.
Advocating for an abolition of the minimum wage or standing up against the increase will not make for a nice sound bite on the nightly newscast, nor will it go over well with a majority of Americans. In a recent poll released by Hart Research Associates shows that 80% of Americans support an increase in the minimum wage. It is time for our elected officials to seriously consider these supposedly "harsh proposals" and have the courage to defend economic reality, over electoral favorability.
Bernie Sanders and Robert Reich Are Confused by Economics. And Government. And Reality | Seton Motley