The new year has brought with it a host of new changes in American law, the most striking of which may be the elevated minimum wage in 19 states. Arkansas, Nebraska, South Dakota, Alaska, and Maryland are among the states where workers at the bottom rung of the ladder will see small increases in their paychecks. Three other states will see minimum wage hikes later on in the year.
While it’s always preferable to see these changes at the local level as opposed to the federal level, minimum wage hikes are almost always a bad idea. Perhaps in more ways than any other issue, however, they find support on both sides of the political spectrum. Who wants to take a stance against American workers? Republicans aren’t afraid to challenge the minimum wage on occasion, but it’s risky.
It shouldn’t be. If you believe in free market capitalism, you should see how dangerous it is when the government interferes in the private sector. It happens all the time, but that doesn’t make it any more acceptable. And when it comes to minimum wage hikes, the evidence is becoming increasingly clear: it doesn’t help the people who need economic relief. A University of California study made the case against minimum wage increases last month with a study that proved state hikes raise unemployment and cut overall income.
Incompatible With Our Values
Even if it was beneficial, though, it’s hard to see how a minimum wage squares with our free society. If an employer wants to pay a certain amount to have a job done, why shouldn’t we let the market decide whether or not he can? What is special about hourly income that makes it an exception to the free market values we claim to care about?
Whatever else the minimum wage movement is about, it’s not about helping the poor. A 2010 study showed that state poverty rates did not budge when the minimum wage was raised. It also found that among those benefiting from a minimum wage hike, only 11 percent were those living below the poverty line. In other words, most people making the minimum wage live in a household where someone else makes more. Spouses, kids, etc.
No one wants to see good people work hard and have nothing to show for it. But if the only reason to raise the minimum wage is to give relief to poor people, then it’s really just welfare in disguise. The free market is not just a descriptor for the relationship between business and customer. It also describes the relationship between employee and employer. Overbearing discrimination laws, affirmative action quotas, and minimum wage laws are a few of the things that prevent our economy from flourishing the way it should. And these regulations prevent people from improving their skills, making themselves more valuable, and climbing the ladder of economic opportunity.
Government interference is an obstacle that stands in the way of the American dream. It should be reviled as such.