All the minimum wage does is exclude small businesses from competing in the market and depress wages. In fact, I believe the majority of our economic problems stem from the fact that we have a minimum wage (in addition to high taxation).
What does a “minimum wage” actually do? A minimum wage is a type of price control that forces people to sell labor at an arbitrarily high price. If businesses were forced to sell their product at an increased price, there would be outrage. Not just from consumers, but from the businesses themselves.
Increasing the price of a commodity artificially lowers demand due to a higher entry barrier, leading to a reduction in supply. In terms of labor, this means fewer jobs available in the market, but the supply of laborers stays roughly the same regardless of demand, and generally increases. The result is high unemployment, the inability to negotiate wages, and a high market entry barrier for small businesses. It also increases the barrier to entry to getting a job, which exacerbates the homelessness epidemic in our country and in addition costs taxpayers money in welfare. This all in turn leads to less production overall, making our economy very expensive to run. It’s like leaving the parking brake on.
What does this mean for big business? They still have to make a certain profit to stay afloat, so they opt to buy the cheapest labor they can find- that being overseas in countries without labor price controls. Child slavery, human rights abuses, and squalid and miserable working conditions because We the American people choose to overvalue our labor.
Where we cannot purchase overseas labor, we import labor, creating the border crisis we have today. The influx of illegal immigrants benefits businesses because they can more easily get away with circumventing price controls by threatening deportation when they try to negotiate higher wages. Our citizens cannot compete with such cheap labor, so it ends up costing them jobs. Not to mention that many of these immigrants, regardless of status, take money out of our economy and send it to their families in their home countries. It also strains our economy to provide for more people than are actually producing an adequate amount of value. Because our citizens are unable to sell their labor any cheaper, they cannot compete with illegal immigrants. This is like telling one business they must sell at a higher price than all other businesses. That business would quickly fail due to lack of customers. The end result is that we have a country of consumers rather than producers.
As for small businesses, arbitrarily inflating the price of labor increases their operating costs. In order to keep their prices the same, they must accept a smaller profit margin. This makes them susceptible to market recession, in turn leading to the government to hand out stimulus checks in order to keep the economy alive, which just ends up costing taxpayers in the future. The increased operating costs and self-necessitated bailouts end up causing prices to rise, resulting in inflation. In addition, minimum wage implemented alongside payroll tax that matches income tax is functionally equivalent to double-taxation. It is mandating to pay the public a certain amount while also collecting taxes on behalf of the public. This strains businesses and penalizes the production of goods and services.
All of this means an over-dependence on big business to supply our country’s goods and services, who in turn have an over-dependence on oil and the petrodollar to keep their businesses profitable. It’s not that minimum wage forces their hand: minimum wage is the ideal outcome for big business because it ultimately reduces competition and increases demand for jobs. They can then take advantage of a desperate population and a corrupt elite establishment to sustain the oil racket, with the justification being the way the economy functions.
How many jobs have been shipped overseas? How many times has legislation been made to bail us out during a recession? The only reason a recession is even possible is because there is a disconnect between the value of our labor and the value we actually produce with that labor. We can reset it every now and then, but the lack of competition will continue to result in large megacorporations too big to fail being bailed out by the American taxpayer, costing us trillions. Until we value our labor at the market price and allow workers to negotiate their own wages, small businesses and local economies in the USA will continue to flounder and fail without government subsidies- subsidies that our children end up paying for. And what they don’t pay for ends up costing the lives and wellbeing of people all around the world through our corpo-military trade racket.
In order to remedy this, we absolutely MUST abolish federal minimum wage, and seek to discourage states from implementing price controls on behalf of citizens. We should also seek to deregulate where reasonable so as to increase the profitability of running a small business, strengthening our local economies so they are less susceptible to market changes such as the price of oil. We’re going to run out of oil someday, and we won’t always have military and market supremacy over the rest of the world.