King Obama called for raising the federal minimum wage to $9.00 per hour in his “State of the Union” speech last night. Does he really hate the American worker that much? Why not $50 or $100 per hour?
The minimum wage actually creates more unemployment. Jobs that may have sufficed at say $8 per hour may be eliminated all together, outsourced overseas, or replaced with technology causing a net decline in job opportunities. Economist Murray Rothbard described the minimum wage law as “compulsory unemployment.” He continued:
The law says, it is illegal, and therefore criminal, for anyone to hire anyone else below the level of X dollars an hour. This means, plainly and simply, that a large number of free and voluntary wage contracts are now outlawed and hence that there will be a large amount of unemployment. Remember that the minimum-wage law provides no jobs; it only outlaws them; and outlawed jobs are the inevitable result.
More on Rothbard’s Crippling Nature of Minimum-Wage Laws here.
Increasing the wage earnings does nothing to increase the purchasing power of the workers money. The suffrage problem with the middle and low classes of America is that they do not have retained income after expenses. This is not to say they do not earn enough, but, rather, the Federal Government is forcing their cost of living too high from the relentless attack on the purchasing power of the dollar. Prices of bread, vegetables, energy, water, and other essential commodities rise faster than wages causing less retained income for the worker.
Newton’s third law of motion: “For every action, there is an equal and opposite reaction.” We have no better luck overturning basic laws of economics than we do laws of physics.