Raising Minimum Wage

One of the things Obama urged during his State of the Union address was for Congress to increase the minimum wage to $9/hour:

He urged Congress to work with states to provide “high quality” preschool to all low- and moderate-income 4-year-olds, and he proposed raising the federal minimum wage to $9 per hour, up from $7.25 today.

Those of us who have studied the Austrian tradition of economics duly point out that increasing minimum wage also increases unemployment. Minimum wage laws create a barrier for entry, especially for those just entering the workforce and therefore unskilled.

Let’s look at minimum wage laws another way. If raising the minimum wage actually increases the average wealth of the lowest paid workers why stop at $9/hour? Why not make it $100/hour or $1,000/hour? Isn’t it time we stopped screwing around and made everybody millionaires? Wouldn’t that put everybody above the poverty line? No, it would make almost everybody in the workforce unemployable, at least legitimately. Most people don’t produce $100/hour worth of value let alone $1,000/hour. If raising minimum wage to $100/hour sounds preposterous and unworkable why do people think raising it to $9/hour is any different?