Saturday, January 4, 2014

How The Minimum Wage Benefits The Government

By, Chris Rossini

The economic backwardness of the minimum wage has been covered exhaustively. A quick Google search of EPJ reveals 492 posts on the minimum wage. It never ends. That doesn't mean we stop, of course. Come back in a few years, and we'll be up to 1,000.

But no matter how many times you explain how economically detrimental the minimum wage is, it doesn't make a dent in the fiat armor. They just jam another increase through whenever they feel the time is most advantageous.

Governments can care less that the minimum wage only outlaws jobs, and harms the most economically vulnerable people in society (i.e., the poor, low-skilled, and teenagers). The horrible economics take a back seat to the juicy benefits that government gets from the minimum wage law.

Henry Hazlitt described the juicy benefits way back on Feb. 7, 1949 in Newsweek:
“For every employer must be kept in constant fear of the Federal officeholders, no matter what he pays, and every worker must be made to feel that his welfare is dependent upon governmental favor.”
So you see, that's where the government's bread is buttered. The minimum wage provides a panoply of POWER!

Every employer must always know that the billy club of government can be swung at any moment. Every employee must know that their pay and welfare are dependent on the good graces of politicians.

What's not to like from government's perspective?

The low-skilled are priced out the market? Who cares? Send them to the unemployment office where they can latch onto the government's bosom. If anything, the low-skilled should be thankful, right? After all, government first forces them into unemployment, only to be showered with "benefits" for not working. That's quite a deal!

The minimum wage is a golden goose of POWER for the government.

Don't bore them with economics.

Chris Rossini is on TwitterFacebook & Google+


  1. Precisely, sir! The minimum wage is a ploy used by power-seeking populists to pander to the people, under the pretense of protecting them from predation by plutocrats.

    1. And the politicians are funded by those selfsame plutocrats!

      What a system!

  2. If the minimum wage is such a burden, why don't employers simply hire workers who qualify as subminimal wage workers? Why no mention of the subminimal wage in this post? The labor department specifically says "employment at less than the minimum wage is designed to prevent the loss of employment." Seems like anyone arguing that the minimum wage kills jobs would quickly point out that the govt conceded it kills jobs when it created the subminimal wage.

    Question: Must young workers be paid the minimum wage?

    Answer: The federal minimum wage is $7.25 per hour effective July 24, 2009. However, a special minimum wage of $4.25 per hour applies to employees under the age of 20 during their first 90 consecutive calendar days of employment with an employer. After 90 days, the Fair Labor Standards Act (FLSA) requires employers to pay the full federal minimum wage.

    Other programs that allow for payment of less than the full federal minimum wage apply to workers with disabilities, full-time students, and student-learners employed pursuant to sub-minimum wage certificates. These programs are not limited to the employment of young workers.

    1. Clueless as always. Since you've never run a business, you don't consider the ramifications of terminating those subminimum wage employees at Day 91.

      Go open a business, or inform yourself fully, before making your silly and half-conceived pronouncements.

  3. As usual the powers that be are shooting themselves in the foot. Keeping teenagers out of the work force and in the underground economy promotes freedom. The teenagers learn how to get along without the system, and the government misses out on taxation.

    The w-2 job is a real economy killer. A w-2 employee can't compete with a free person who can work when and how they want. Libertarians should stop cheering for people to get involved in the w-2 con game.

    1. Too true, unfortunately. Cash only, under the table is the best bet for teens and twenties.

  4. Well put, its becoming harder and harder for the young to enter the work force and develop competency. How long before its common for children to be sent overseas to gain some experience in a real economy only to decide to stay to maintain their freedoms.

  5. Minimum wage rate increases are really only a band aid to the problem.... the problem is the size of our government and it's requirement to tax the !@#$ out of the citizenry to pay for itself. Businesses intend to make a profit. Most all consumer goods and services are taxed. Taxing them doesn't disincentive them at all.... Taxes and miscellaneous fees imposed on business is merely treated as a "cost of doing business" by those entities and that cost is passed to the consumer. If we cut the amount of taxation, consumer cost for goods and services could be lowered allowing those on a lesser wage to be more middle class.