The minimum wage is little more than a political tool that ultimately harms the overall economy by raising the unemployment rate and driving businesses elsewhere  Politicians have transformed the minimum wage into an indicator of social development. Governments often cite their raising of the minimum wage as an example of their commitment to fostering social justice and equality. This is all nonsense. The minimum wage is nothing more than a useful, simple tool that politicians can exploit without addressing underlying social and economic ills in society. [1] During times of economic expansion wages are generally rising as new businesses are formed and existing firms take on more capacity and workers. During such times, raising the minimum wage has no effect other than being a useful political move. In times of economic contraction, firms close and lay off workers and unemployment rates rise. In such times, the minimum wage hampers the market from clearing, keeping more people out of work than necessary. For markets to function efficiently, wages must be allowed to fluctuate freely, equilibrating with demand for labor and reflecting the macroeconomic situation. Minimum wages tend to lock in wages at pre-recession levels making countries less competitive and less quick to recover when economic downturns occur. Furthermore, minimum wages can often make countries unattractive for businesses to invest in, as the cost of hiring workers can serve as a serious disincentive. For this reason, businesses tend to locate in countries with no minimum wage laws, such as Germany, or where they are comparably low. In order to stay competitive, to bolster economic dynamism and gain global competitiveness, countries should treat labor like the commodity it is and allow the labor market to self-correct, and not institute minimum wage laws.  [1] Dorn, Minimum Wage Socialism, 2010