You’ve heard it. “Raise the wage," “Fight for 15”… it’s all over the place. The idea behind it, of course, is that so many of us are struggling to pay the bills, so the solution must be to force employers to pay the workers reasonable salaries. Makes sense, on its face. Every worker deserves a decent living wage. People ought to be prosperous and comfortable, not broke and desperate. There are ways to make it happen and ways to make it not happen. Raising the government-imposed minimum wage is a way to make it not happen. I’m not going to make an emotional appeal about the dubious morality involved in using the threat of violence, the gun of government, to get more money from somebody. I’m going to try to keep it strictly economic.

Minimum wage increases make labor a more expensive investment. This shrinks the demand for workers as the supply treads and rises. The employment and salaries of workers are very much dependent on the job market. A healthy job market is a result of there being significantly more jobs than workers, which causes employers to offer competitive salaries. This relies on businesses being allowed to succeed and grow, which is what increases the number of jobs. When the minimum wage is raised, the creation, success, and growth of businesses sink through the floorboards. Keeping just five employees on the clock for only eight hours per day and 5 days per week, at $15 per hour, comes out to $3,000 per week, and that’s for only 40 hours of operation. Most business owners simply cannot afford to pay that much for labor, relative to the return. The higher the minimum wage is raised to, the more the job market is depleted, which chops down the factor of wage competition between employers. So, in addition to increasing unemployment, this also prevents organic salary raises and therefore limits the prosperity of the mainstream work force to the coercive hand of the state. The worker’s buying power decreases as the entailed inflation devalues the dollar.

The increased cost of labor inevitably leads to an increase in consumer prices, as employers need to compensate for the high labor expenses somehow, and that summons cost-push inflation. The higher the minimum wage is raised, the higher consumer prices rise. The higher consumer prices rise, the less your money is worth. Additionally, cost-push inflation causes the demand for higher loans to rise, which means the banks need more money to lend out. When the banks need loan money, the Federal Reserve divvies out credit to the banks, while the Department of the Treasury prints more fiat currency for them. The more credit and cash is in circulation, the less your money is worth. The less your money is worth, the more work you have to do to pay the bills, and the less you can buy. 



Personally, I suspect the corporate conglomerate of big banks of using loan-demand influxes to exploit the Federal Reserve’s credit allocation and the DOT’s production rises so these banksters can increase their own relative buying power, but that’s a suspicion I cannot prove, it just fits like a tailored glove. I digress. 


It’s easy to deduce that small businesses couldn’t handle a minimum wage hike, but what about big businesses that employ lots & lots of people, such as Wal-Mart? According to data collected by "The Libertarian Eye:"

“-Wal-Mart has 2,000,000 employees


-Average employee makes $8.81 per hour


-Paying $15 per hour would give a raise of $6.19 per hour


-That would cost Wal-Mart an additional $12.4 million per hour 


-Which would cost Wal-Mart an extra $99 million per 8 hour day

-Which would cost Wal-Mart an extra $36.15 billion per year


-Wal-Mart profited $16.8 billion last year


-This raise would cause Wal-Mart to lose $19.35 billion


-Wal-Mart would now be out of business.”


That’s 2 million people put out of a job in the blink of an eye, just from ONE company used as an example. This has actually come true on a small scale; Wal-Mart shut down locations in Los Angeles following the city government’s ordinance to increase the city’s minimum wage to $15 by 2020. Raising the minimum wage would not only eradicate small business, it would even cripple big business. At that point, not much else is left. Bye-bye economy, hello dumpster diving. 



The general population’s buying power decrease (resulting from minimum wage increases) make it harder for the people to buy stuff. When people can no longer buy stuff, remaining companies go out of business. That causes even more of our jobs to disappear, so if you DO manage to keep or acquire a job after a substantial minimum wage hike, the boss can very easily replace you, and therefore has no monetary incentive to pay you well or make your job comfortable. You might also find yourself replaced with a machine, which happened to me personally at a factory I worked at. Employment cost increases lead to companies investing in labor cutting, which machines do an excellent job of.


The intention of minimum wage is, supposedly, to increase the buying power of the poor and middle class, merely by sucking it out of the paws of the wealth-hoarding corporate elite. The effect of raising the minimum wage, however, is decreasing the relative wealth of the very people that the minimum wage raises are allegedly meant to benefit – the lower & middle classes. Trying to use government to divert buying power away from wealthy cronyists is an unwinnable and misguided battle. Government works for the highest bidder, and that’s probably not you. If you want to help the lower class, get the state out of our economy. I want every worker to earn a comfortable wage, and that’s not going to happen until things like minimum wage, along with other crippling regulations and taxes imposed on businesses, are gone, and an organic job market can develop to create wage competition, so nobody has to settle for a low salary anymore. The free market works, government does not.