Legally Raising The Minimum Wage In The US Is Pointless

The minimum wage is good for several reasons: 1) It creates a stronger middle class. More people will have greater disposable income which they will spend, thus stimulating the economy. This is good for businesses and society overall. 2) It creates a sense of 'worth' for people. If a person is paid a decent wage, knowing that they can meet their daily needs, they'll feel better about themselves. This leads to greater productivity in the workplace and creates a more harmonious society and an environment that is conducive to positive psychological and emotional well-being. 3) It prevents a situation of a 'race to the bottom.' Competition is sometimes bad. In the case of wages, competition will always result in the driving down of wages, because there will always be someone who is willing to work for less, particularly in unskilled jobs. Proponents of the free market claim that people who are more productive will be paid more, but then by that logic, employers will fire more productive staff and hire trainees in order to keep wages low, since the cost of keeping a productive worker is higher than the productivity gained. Here are two common arguments against the minimum wage that I would like to debunk: 1) Businesses will move offshore because they will no longer be competitive due to the increasing cost burden of the minimum wage. This argument is flippant, at best. The fact is that developing nations like China will always have lower labour costs than the US. Let's say it costs 50c per hour to hire a person in China; in the US the minimum wage is around $7 (federal). Even if the minimum wage were lowered to $4 per hour, that's still eight times higher than the minimum wage in China. Therefore, $4 is technically still too much in labour costs, even though it's lower than $7. Now, one may argue that American businesses would be willing to absorb a little bit more labour costs if it means keeping jobs onshore. So, at what figure is that? Is it $4, $3 or $2 per hour? Even at $2, that's still four times the cost of the Chinese worker, not to mention other potential savings made in China, etc. You see what's happening? It's beginning to be a 'race to the bottom' and that's assuming that businesses are willing to absorb that little bit extra in order to stay in America, which is contrary to the logic of capitalism and the free market, since the purpose of a business is to maximise profit for its shareholders. Also, even if you argued that $2 per hour is okay because that's what the market pays, then the other question has to be: is this going to be enough for a person to live? The answer is likely to be no, since no person could live off $16 per day (assuming that he/she works 8 hrs per day) in the US. 2) People choose to work in unskilled jobs and therefore it's their fault if they earn low wages: should I even dignify this ridiculous statement with an answer? Finally, the no-brainer. All major developed nations in the world have a minimum wage; some might have collective bargaining, but the result is essentially the same. If you look at the countries with the highest standards of living according to human development indicators, all of them have a reasonable minimum wage. Why is that? It can just be a coincidence? The minimum wage has been proven, tried and it works.