The minimum wage policy is one that continues to divide many folks on the grounds of what it should offer, and how we should come to the right amount of the standard it sets. Seldom discussed, however, is that the concept of a minimum wage is a very detrimental policy to implement, and in fact the very demographics that such a policy seeks to serve are actually hurt the most by its existence.
Consider the most basic, fundamental problem of implementing a minimum wage: principle. While the focus of many policy questions is what the policy should include or exclude, hidden from the political (and societal) discourse is what the minimum wage purports philosophically, and that is the principle that one has a right to someone else's money/property. Expanding on this, it is making a claim that employers cannot be in complete control of their property. Going even a little further, a minimum wage policy declares that someone other than the employer (who, by the way, is the primary user of their own property) knows what the right amount of pay is for any job.
But let us focus on the first philosophical point, that is, that we can make a claim on someone else's property. To draft a minimum wage policy is to take from an employer money they own and would otherwise not pay their employee and give it to them (we'll discuss the economic aspect of this in a bit). Do we find acceptance of this principle justification in every other aspect of property? We would have to for the principle to hold up to scrutiny, otherwise it is arbitrary and meaningless. One cannot base an argument on a principle that is not fully followed, because then the principle isn't validated. So the fact that we cannot demand someone else's property from them for our own good nullifies this argument. Even claiming that government has the right to make a claim as this is faulty, because nothing legitimizes a right which is not already expressed by an individual. Joining a group and declaring to others that you have such a right does not bequeath you that right, even if you act on it.
Unfortunately, we live in a society that really doesn't seem to give an ear to libertarian philosophy. So an economic analysis will most likely resonate more.
So what is the economic argument against the minimum wage? Well, assume that a small business is paying employees $10 an hour for their labor, and these aforementioned employees are on the lowest productivity rung on this company's ladder. Now, a new minimum wage policy has been implemented, and the employer has to pay these employees $15 an hour. What are his options?
Well, he has a couple of options to use jointly or singly:
A) Pay his employees the new wage, taking away from his profit margin, assuming he has the means to do so, which not every business enjoys. This option leaves less growth or the company is operating in the red.
B) Pass the buck, and increase the cost of his product or service to make up for the increase in expenses. This will risk him losing business, and he would then have to resort to other options.
C) Cut his employee base to make up for the cost. This will leave those seeking a living wage with no wage at all, hardly better. It will also cut into his profits since he'll be losing productivity.
D) Cut his employees' hours to make up for the cost. This will leave them no better off than before, but the employer will lose productivity.
E) Fold the company.
You will notice that none of these options is beneficial to the employer or employee.
Finally, a minimum wage is a policy that doesn't understand economics. You cannot expect to add productivity with the stroke of a pen, so the employer is always losing out. A minimum wage ignores the supply side of economics in this sense. Not only that, but a minimum wage sets a price floor on labor. Any job that isn't worth the minimum wage to an employer is lost, so those with little/no skills along with the youth lose out on jobs that could help them.
This policy is in serious need of discussion based on the economic and philosophical implications it brings. We must not let the dialogue stay with arguments based on "fairness", but rather show the harm that is done with this law.