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Minimum Wage Is Damaging
minimum wage
To satisfy some people with entitlement or victim mentality, taxpayers' money is wasted to enforce this useless law, minimum wage. It is against free market. Reward has to be earnt, not to be given for nothing. Minimum wage will demotivate those who really put in effort to earn more.

Unemployment

The higher the minimum wage, the higher the unemployment is. In economics, when the price goes up, the demand goes down. Minimum wage causes supply of labour to be higher than demand of labour. Workers who want to sell their labour outnumber businesses that want to hire them.

Businesses exist and are motivated by profit. Some people demonize profit-making of corporations, indirectly attacking the very existence of corporations. Why do these people want to be part of so-called evil and greedy capitalists in the first place? Never bite the hands that feed us. Companies hire workers only when the profit generated by the job of the worker is estimated to be higher than the cost of that worker. When the job is estimated to generate profit less than the cost of the worker, the worker will not not be hired. Small businesses may choose to just close down. Some employers will look for ways to automate the work.

With minimum wage, companies will not hire inexperienced workers. Inexperienced workers will not have chance to to upgrade their value through valuable on-job experience. Companies will also not increase manpower so the existing workers will have to do more work.

Price of goods

If businesses decide to keep the employees despite of the minimum wage, then they will increase the price of goods. If they choose to close down, then the goods in the market will decrease, thus the price of the goods will increase.

Even the people who get the minimum wage will get the impact from the increase price of goods because there is chain reaction. The benefit from the minimum wage is canceled out by the increased price of goods.

When everyone is given money without contributing to productivity, then the value of money decreases because the goods produced do not increase. To enjoy lower price of goods, eliminate minimum wage, stop watching TV or movies, and start increasing productivity.

Posted: 2016-09-18 by Ong Seng Aun.
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