Those clamoring for higher and higher minimum wages claim to want to help those with little. What they do not seem to realize, however, is that the true path to success and greater wealth cannot be guaranteed for people.
What is the real "minimum wage"? This.
Amid all the national discussion about raising the minimum wage, it's easy to forget that there are thousands, if not millions, of Americans who work for less than the minimum wage—some even for negative wages (imagine that). Principal among these less-than-the-minimum are self-employed workers, tradesmen and women and small business owners, especially those starting new businesses.
Working so many hours for so little money isn't the plan, but sometimes that's how things work out until you can manage to get ahead.
After covering overhead, including minimum wage for their employees, small business owners may end up losing money—i.e., making negative income. How much is that per hour? Bankruptcy may provide some relief, but then watch out for the taxes related to "forgiveness of debt income."
Most small business owners, though, will either hang on and hope things get better, or quietly fold before they get worse. The only thing the owners cannot do is hire anybody for less than the minimum wage—unless they take in a partner who as co-owner will be exempt.
I was a teenage entrepreneur: I delivered newspapers. After folding the papers, delivering them, going around in the evenings to collect payments, keeping my bike going and (rarely) borrowing my father's car for the extra-heavy Sunday papers, I had no idea what my hourly wage worked out to be.
Many folks in other categories are paid nothing or next-to-nothing. Interns, some of those in work-study programs, job trainees, family farmers, kids doing chores and, depending on how you define "work," ordinary students.
And what about the domestic workers known as "mothers" or "fathers"? Surely they deserve a wage commensurate with their responsibilities of raising the next generation. Same goes for those caring for disabled family members.
The largest category of zero-salaried workers are the millions who volunteer their services and expertise for nonprofit organizations—churches, YMCAs, schools, hospitals, kids' sports leagues, recreation programs; the list is endless. So it's OK for them to work for $0 per hour, or for the minimum wage, but illegal for anything in between. Does that make sense? If they can agree to work for $0 per hour, why not for $1 or $5 or any other number agreed to?
The answer, of course, is that these volunteers and all those others who make sub-minimum wages or none at all are doing so by choice. Government steps in to dictate wages for the poor—who are then barred from working for less, even if they want to. With fewer jobs available because businesses are forced to pay higher wages, then the jobless poor are forced onto the dole—and presumably will vote for those who provide the best dole.
So the minimum wage, like so many government programs, is really a scam that never gets busted. Isn't that how these programs grow? There are always a few vocal supporters of any program and a lot of silent victims who mostly don't even know what effect the programs have on the public at large and the economy as a whole.
Minimum-wage laws raise business costs and increase unemployment. But they also require bureaucrats—who make a lot more than minimum wage—to administer the dole and regulate wages. So what's not for politicians to like?