The idea of a $15 minimum wage is an ostensibly alluring one, but reality tells a different story about what such a policy creates.
Minimum wage laws are essentially a price floor, meaning that for the cost of a person’s labor, the government places a mandatory minimum value on that labor, regardless of what the labor is actually worth.
The job could be sharpening pencils, or anything you so desire; is pencil sharpening worth $15 an hour? Heck no!
So, with our silly pencil-sharpener employee, let’s make a hypothetical situation to explain the issue.
Pencil-sharpener gets paid $5.00 an hour to sharpen as many pencils as he can. He doesn’t make much money, but he has a job for which he does get paid, and one where he will make important employer connections.
Then along come Bernie and his ilk, saying that he deserves $15 an hour. Let’s say that the minimum wage is increased to that amount. What happens to Mr. pencil-sharpener?
He gets fired, and the work which he was previously doing is farmed out to another employee who is lucky enough to remain with the company.
Businesses are not exempt from the laws of economics, no matter what law the government passes. A law governing the minimum wage will always be overridden by the law of supply and demand.
As Henry Hazlitt writes in Economics in One Lesson,
You cannot make a man worth a given amount by making it illegal for anyone to offer him anything less. You merely deprive him of the right to earn the amount that his abilities and situation would permit him to earn, while you deprive the community even of the moderate services that he is capable of rendering. In brief, for a low wage you substitute unemployment.
Hillary Clinton and Bernie Sanders’ supporters do not understand economics, not one bit. And they are trying to make economic policy based off of ignorance. And that is what is so dangerous about these economic illiterates.
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