Minimum Wage Laws

Minimum wage laws create unemployment.

If passing minimum wage laws are the secret to raising wages, then why doesn’t the government make everybody rich by setting the wage to a million dollars?

Would this solve poverty in third world countries, or would this make everyone — who produces less than the million-dollar minimum wage — unemployable?

The truth is that those who do not produce enough to merit the minimum wage will become unemployed by such laws, and those who do produce more than the minimum wage do not need such laws.

Under capitalism, if a laborer — say Michael Jordan — is not paid enough for what he produces, then someone else will hire him and pay him more. It is competition for labor — that produces — that pushes wages up.