Rather than raise it to ten dollars an hour, the society should abolish minimum wage by getting the government out of the way.
While the economic argument to abolish minimum wage is well established, Donald Trump isn’t buying it.
I happen to know a businessman who is working hard to pay his employers a dollar or two more. He is doing so because he wants to hire better unskilled workers and retain the best. He is a nice guy but that’s not why he’s doing it. He knows it will make his business better.
If Donald Trump gets his wish in the above video, he will damage all businesses that pay above the minimum wage. Their ability to gain and keep superior workers will vanish. Prices will have to go up (eroding the value of the higher wage) and quality will suffer.
When nanny-state liberals use taxes to raise the price of cigarettes or sodas, they do so in order to reduce the number of cigarettes or sodas purchased by consumers. That is bad politics (since it reduces freedom) but at least it is good economics. The economic law is that, when you increase price, you reduce the number sold. (Under certain circumstances, you can get different results, but those are relatively rare.)
But minimum wage is both bad politics and bad economics. You are increasing the price of employees for businesses. Naturally, they will stop hiring as many of them. The minimum wage creates unemployment, and the most vulnerable in society are hit the hardest. Young blacks are devastated.
Also, the minimum wage law means that businesses have to pay good workers less than they’re worth. If I have a business that employs ten workers, and there are two of those ten that keep the business running smoothly, I will want to make sure they are happy working for me. But, because of the minimum wage, I am forced to pay marginal workers more than they’re worth and pay more valuable workers less than they’re worth. Thus, there are people who don’t make more than minimum wage because their co-workers should make less than minimum wage.
Ironically, raising the minimum wage would also increase the value of undocumented workers in this country.
Of course, Donald Trump may be counting on a Republican Congress refusing to go along with his plan. It is hard to know how honest he is being here. I suspect that he’d really rather let the states settle the issue for themselves.
Here are a couple of good videos on the minimum wage: