I got to thinking about this the other day, thought I’d posit the question:

State minimum wage mandates vastly reduce employment among inexperienced and unskilled workers, by increasing the wages for some to above-market rates, while others lose their jobs to pay for the increase. Now, instead of, say, ten workers at $5/hr, a business owner might only be able to hire six workers at $8/hr, while four workers lose their jobs (unlike the government, business owners can’t steal money, or cheat their books, or print money, or borrow money against your children’s future labor, they actually have to earn money, meet a monthly budget, and pay their bills; so when costs suddenly go over budget—like, say, an artificial wage increase mandated by the state—cuts then have to be made to get the business back within budget).

For those of you who doubt this economic fact, here’s a chart, published by Unbiased America, which shows that the higher the minimum wage, the higher the unemployment for youth, which are typically the most inexperienced and unskilled workers, so they take the brunt of the resultant job loss:

minimum wage chart

It only makes economic sense; you raise the price of something, people buy less of it—and that includes labor.

So, if minimum wage mandates were eliminated, and it was no longer illegal—in this free country of ours—for people to actually work for a mutually agreed-upon wage that might be lower than what the state dictates, then employment among inexperienced and unskilled workers would rise. But here’s the thing: the wages would be distributed evenly, to more workers, and the workers would receive the wages without government interference. Now, instead of six workers making above-market wages and four workers being unemployed, perheps we’d be back up to ten workers making market-rate wages, but with no government program siphoning off a big portion of the wealth being transferred in the process.

However, with social programs (redistribution of wealth) the government takes money from some people (the working class), pockets a bunch of it, hands a bunch of it out to their cronies, then gives a little of what’s left to other people (the recipients of the programs), mostly in exchange for their votes so they can stay in power.

government siphon2

Politicians enrich themselves immensely through these programs, which is why they so vigorously sell them to the people. But taking wealth from the people, spreading a fraction of it around among them, while making a huge “rake” in the process, does nothing toward increasing the overall wealth in society—it simply impoverishes more people while enriching the politicians and bureaucrats. The REAL wealth transfer is not from some people to other people, but from all the people to the government. Just take a look at Venezuela…you don’t see the government officials standing in those food lines.

However, eliminating minimum wage mandates would prompt a natural redistribution of wealth among the workers, and take the middleman—the government—out of the loop, thus losing their “cut.” In other words, there’d be a free-market redistribution of wealth, rather than a government-run wealth redistribution program, and the people—society at large—would retain the money within the economy, instead of sending it to the government to fund the programs and enrich the politicians and their cronies.

So I wonder: is this perhaps why politicians insist on minimum wage mandates? To keep themselves, their grubby hands, deep in the wealth transfer loop? The higher the minimum wage, the higher the unemployment, and the higher the unemployment, the more government wealth redistribution programs that are “needed,” and the wealthier politicians get, standing ass-deep in the redistribution stream…