I will be writing this short essay as a response to an article by ancap.sam on Instagram that you can read here. This is a very old essay, however I just saw it and disagreed with it violently and wanted to give my thoughts on the minimum wage, as well as state some facts on it. So let’s begin, he starts off by explaining the origins of the minimum wage in both the world and America; so there isn’t much to talk about there. However he goes on to say:
Some claim that minimum wage is a human right, however this is the opposite of what is true. Forcing a business to pay it’s workers a certain amount is tyranny, and it contradicts free-market capitalist values. Minimum wage should not be enforced. Instead businesses should set up their own standards of appropriate wages, and be able to voluntarily balance out salaries, according to the average living wage of their communities. Minimum wage policies should be discarded, because it is an infringement on the human right to private property.
My stance on the minimum wage is that it is not a “human right”, as I am a firm believer that rights do not exist in the material world. However even if I did believe in human rights, how does forcing a business to do anything violate that? Because it goes against free-market capitalist values? So does that mean anything that goes against your world view is automatically tyranny? That’s a childish outlook, and one you are providing no support for. You are stating that enforcing a minimum wage violates property rights, and that property rights are a human right; yet are simply saying that as if it’s self evident, which it isn’t. How are property rights, human rights? You haven’t explained this. He then goes on to say:
Minimum wage laws are also very violent. If a company does not pay the minimum wage requirements, the institution will be fined by the government (At least in the U.S.). If the managers of the company refuse to be fined, they may face jail time. If the managers refuse arrest, then they will be forcibly handcuffed or even shot. Therefore minimum wage laws also abuse the right to a free life and the right to economic opportunity. Minimum wage is not a right, it is a violent set of policies used by incompetent workers to steal money from businesses.
Yes yes we’ve all heard the argument of how technically every law is violence, we understand this, and do you know why this is? It’s because if laws didn’t have violence to back them up, they wouldn’t be enforced. We’ve known this since the beginning of time; it’s why every non-primitive human society has had some sort of central monopoly on violence; it’s not just some giant conspiracy against freedom. You further go onto say that the minimum wage violates human rights, but fail to explain how but are just yet again saying it as if it’s self evident, and aren’t explaining why “stealing from a business” violates any rights that exist outside your head.
Minimum wage is not as glorious as it sounds. If a company is required to pay their workers more, then they will either have to maintain a lower amount of workers per establishment, or the company will have to raise the prices of their services/products if they decide to keep the same amount of workers.
Actually this myth that raising the minimum significantly harms employment is absurd. It may seem like basic economics that raising anything above market value has serious consequences, but that’s all it is; basic economics. Economics is much more complex that that, and if we take a look at some graphs
As you can see, changes in the minimum wage have almost no affect on the employment rate. In figure 1, we clearly see that the minimum wage has significantly been going down due to the government not adjusting it for inflation, and yet, employment isn’t going up. According to your logic, if the minimum wage goes down, unemployment should also go down, so why aren’t we seeing this happen? In figure 2 we see a metagraph showing 64 independent studies done on the minimum wage, and we see almost all of them concluded little to no negative affects. And just to top it off, a study done by the Center For Economic Policy and Research reviewed hundreds of different studies done on the minimum wage and concluded:
Economists have conducted hundreds of studies of the employment impact of the minimum wage. Summarizing those studies is a daunting task, but two recent meta-studies analyzing the research conducted since the early 1990s concludes that the minimum wage has little or no discernible effect on the employment prospects of low-wage workers. The most likely reason for this outcome is that the cost shock of the minimum wage is small relative to most firms’ overall costs and only modest relative to the wages paid to low-wage workers. In the traditional discussion of the minimum wage, economists have focused on how these costs affect employment outcomes, but employers have many other channels of adjustment. Employers can reduce hours, non-wage benefits, or training. Employers can also shift the composition toward higher skilled workers, cut pay to more highly paid workers, take action to increase worker productivity (from reorganizing production to increasing training), increase prices to consumers, or simply accept a smaller profit margin. Workers may also respond to the higher wage by working harder on the job. But, probably the most important channel of adjustment is through reductions in labor turnover, which yield significant cost savings to employers.
And even if you think this is still all just some big conspiracy and that no actual economists support the minimum wage, here’s a list of over 600 economists who signed a petition in support of not only the minimum wage, but also raising it. Your special snowflake Austrian “economists” share a very minority opinion on this matter in the economic community. His last argument is this:
There are multiple countries that do not have minimum wage laws. One successful example is Switzerland. This country has rejected minimum wage laws, and yet their economy is very strong and stable. With it’s limited amount of government control, a market economy, no wage laws and stable politics, this country is an ideal place to live.
While it is true that Switzerland has no minimum wage, do you have any idea why it is able to have fair wages set? Obviously not, since you provided no source that I could find in your references linking to any information on Switzerland; so I’ll explain it for you. The reason Switzerland is able to go without a minimum wage is because of their union system, that is heavily overseen by the federal government, which gives the workers more autonomy and work place democracy than they normally would under a free market capitalist system. This autonomy, mind you; guaranteed by their government. So this argument is actually more of an argument for work place democracy, and in turn, socialism.