Why Minimum Wage Laws Hurt the Unskilled Laborers

Many people who do not understand basic economics believe minimum wage laws are a positive thing. It’s easy to believe this but the truth of the matter is these laws are actually detrimental, especially to unskilled laborers who the laws are purported to protect. The following video does a great job of explaining this fact:

Another argument this video doesn’t address is the claim minimum wage laws are the reason we get paid what we do today. I’m not talking about unskilled laborers in this case but everybody, especially those in higher paying positions. Some advocates of minimum wage laws claim the abolition of these laws will cause everybody to receive far lower pay but this isn’t at all true. If your employer pays you an hourly wage of $30.00 and the minimum wage is $10.00 and hour abolishing the minimum wage law won’t drop your pay by $10.00 and hour. The reason you’re paid $30.00 an hour is because your employer believes you bring at least $30.00 and hour of value to the company, not because you bring at least $20.00 an hour in value beyond minimum wage. Were minimum wage laws to be abolished tomorrow it’s unlikely anybody would receive a pay cut, but a huge number of unskilled laborers would find themselves with opportunities to work as factories were brought back to the United States (unless other rules and regulations continue to make manufacturing in this country too cost prohibitive).