PragerU Video: Does The Minimum Wage Prevent Poverty?
In fact, raising the minimum wage is economically detrimental. Basic economic knowledge states that wages are the cost of labor, meaning that if you artificially force wages upward then businesses are going to have to find a way to offset that cost, whether it's through higher prices, fewer benefits or hours or laying off workers altogether.
Under a free market economy, businesses have to compete for the best workers available, which is why they are compelled to offer wage and benefits to the employee's satisfaction. If the employee doesn't feel like they're being fully compensated for their talents and experience, then they can either not take the job or leave their job for another one that offers better compensation.
It's the workers and the consumers who in the end are harmed by the minimum wage, which only exacerbates the issue of poverty, not solve it. That's why, as economist David Henderson argued in a 2014 PragerU video, the actual minimum wage should be zero (video below):
In fact, raising the minimum wage is economically detrimental. Basic economic knowledge states that wages are the cost of labor, meaning that if you artificially force wages upward then businesses are going to have to find a way to offset that cost, whether it's through higher prices, fewer benefits or hours or laying off workers altogether.
Under a free market economy, businesses have to compete for the best workers available, which is why they are compelled to offer wage and benefits to the employee's satisfaction. If the employee doesn't feel like they're being fully compensated for their talents and experience, then they can either not take the job or leave their job for another one that offers better compensation.
It's the workers and the consumers who in the end are harmed by the minimum wage, which only exacerbates the issue of poverty, not solve it. That's why, as economist David Henderson argued in a 2014 PragerU video, the actual minimum wage should be zero (video below):