The Minimum Wage Hurts Poor People

Confusing right? You've been brainwashed the exact opposite mantra your whole life so it may sound a bit counter-intuitive to say that the minimum wage hurts most the very people that it is supposed to help. Welcome to Planet Earth.

by Quinton Figueroa on June 5th, 2016

Like many socialist policies that are well-intentioned, the mathematics and reality behind the minimum wage makes no sense and ends up doing more damage than good. But this is obvious to anyone with an IQ above room temperature. Any time you artificially rearrange the way an economy should work with your opinions you are going to create pockets of distortions that would otherwise not exist. Allow me to explain.

The minimum wage causes greater unemployment

If you think unemployment is a good thing then you should support the minimum wage. The minimum wage causes unemployment. Every job has a price that goes with how needed or not needed the labor is. Labor that is in high demand and hard to find comes with a big price. This is why doctors and lawyers generally make a lot of money. They perform labor that is really needed and that very few people can do.

This is also why jobs like working at a fast food restaurant, bagging groceries or being a janitor come with a low price. These jobs aren't in the highest of demand, but even more importantly, basically anyone can do these jobs. So the amount of money these people make is much, much less than a doctor or lawyer. Most people get this.


Pay these people more so they can make $0/hr. Wait wut?

So if McDonalds is paying an employee $8/hr to take orders and prepare meals for its customers it is paying this based off of a number of factors. McDonalds didn't just arbitrarily come up with $8/hr. It arrived at this number because the money they make off of this labor is worth about this price. If McDonalds made a lot more off of this employee then they would pay them a lot more. This is why managers make more than the lower level employees. You make what you're worth.

But now what happens if every employee making $8/hr demands to make $15/hr? Well most people would assume that if they all went on strike and demanded that they get $15/hr then they would get it. But math doesn't work this way. You can't just arbitrarily raise the wage of a job. If McDonalds has to pay a low skilled worker $15/hr because of a new minimum wage law then they're going not going to be able to magically come up with this money to pay for this job. They were paying $8/hr for a reason -- no, not because they're greedy -- because businesses have expenses and if they paid everyone higher than they're worth they would go bankrupt.

But enough beating around the bush.

If you were to raise an employee's salary from $8/hr to $15/hr a company isn't going to magically start paying $15/hr now. They'll just fire 2 $8/hr employees and either replace them with 1 $15/hr employee who is as productive as 2 $8/hr employees or they'll replace them with technology. This is why you see a lot of businesses switching over to self checkout, or placing orders through apps and things of this sort. People are being replaced by technology because it is becoming less viable to hire $15/hr employees to do work that is only worth $8/hr.

So while most people think raising the minimum wage will ensure that these same people making $8/hr will now make $15/hr (not mathematically possible) they instead all get fired. UNEMPLOYMENT. Raising the minimum wage destroys low skilled jobs. This is why you no longer have an usher seat you when you go to a movie theater. This is why people no longer pump your gas at the gas station. And this is why you are seeing less people helping you with customer service at the grocery store, fast food, customer service on telephones and a whole litany of other things. These jobs have been destroyed and are being destroyed by the minimum wage.

So if you really, really care about poor people and if you really want to help poor people then you have to oppose the minimum wage. Because the minimum wage destroys jobs. If you care about jobs and unemployment then you can't support the minimum wage.

Is it better to have somebody making $4/hr seating people at the movie theater or making $0/hr unemployed because the movie theater can't pay them a minimum $8/hr? Are you able to see that far into the future to understand how this works? Can you look past your current, greedy personal incentives and see the actual dire consequences of raising the minimum wage? Are you able to actually grasp how every job has a price and a person can choose to accept that job or not? Do you get that if a job pays too little that you don't need to work it? But do you also get that if there are no more jobs that pay little then you only have high paying jobs that only a few people can work?

Raising the minimum wage doesn't make low skilled jobs pay more. It just prices them out of the market so they no longer exist. People who are fit to do jobs will do them. And if people are unfit then they won't. When you destroy a low skilled job this person can't magically do a high skilled job. Not everybody is a doctor or a lawyer. And the more we destroy low skilled jobs the more we are only left with higher skilled jobs that require skills. You're hurting poor people. It doesn't matter if it makes you feel good by raising the minimum wage, the reality is you're hurting the very people you think you're trying to help. But since you're unable to see 2 days into the future you are unable to synthesize these concepts and grasp this reality.

...But rich, greedy CEOs take all the profits!!

But what about all these rich executives who make all these profits? If you're really mad about rich executives who make profits why would you work at McDonalds? Why would you voluntarily want to work with a company that exploits their workers and takes all the profits for themselves? Why would you VOLUNTARILY work at a company that is screwing you? They didn't force you to work there. You chose to work there. And if they are screwing you then you chose to be screwed. Why would you choose to be screwed?

Oh right, because they're not screwing you and you don't have the balls to start your own company. Of course nothing, absolutely nothing, is stopping you from starting your own company and doing what you want with the profits. But of course starting a company is hard and actually finding a way to make a profit is even harder. And then once you make a profit finding the best way to allocate this profit to further the business in the future is also hard. But for whatever reason the $8/hr employee somehow knows all of this, but doesn't quite have the balls to actually do it. Makes sense.

It's not evil to make a profit. And if it is and you work there then you support an evil enterprise. And if it is evil to make a profit why don't you start a company that doesn't have profits? Why aren't you paying people more than these evil companies that make profits? Why not? Stop with all this talk and let's see you put it into action. Outdo these stupid, greedy corporations that exploit their workers. Pay your workers more. Talk is cheap. Why don't you do something about it if you really care about poor people?

You can't because they're not exploiting workers who voluntarily choose to work there and who get value by working there.

The minimum wage leaves less jobs to go around

As the minimum wages go up there are less and less places for low skilled workers to work. This is a terrible thing for poor people. Poor people need places to work otherwise they are unemployed.

As I have already pointed out. When you raise the minimum wage you don't make it so a low skilled worker will make more. You destroy that job. A business can't afford to pay that worker more, that's why they're getting paid what they are. When you raise the minimum wage that job is destroyed and now you have more unemployment.

And as a result of all of this there are ultimately less jobs to go around. So now you have low skilled workers fighting harder and harder to get these low skilled jobs that are so few. It's great for middle class and rich people who have skills and can still have their pick at the high skilled jobs. But it's terrible for low skilled people who can only do the low skilled jobs that no longer exist.

We don't see a lot of jobs we used to see because they have been destroyed by the minimum wage. Would you rather have a job at $4/hr or would you rather have no job? Because a $4/hr job (like an usher) isn't going to magically pay $8/hr because you told them that's what they have to pay. They will just destroy the job and create more unemployment.

Way to go guys, I thought you were supposed to care about poor people? Do you really care about poor people or are you just paying lip service to poor people? Do you really care about poor people or are you just too greedy and too stupid to fully do the research to know what really helps and hurts poor people?

The minimum wage creates less opportunity for skills

When the minimum wage destroys jobs it only leaves high skilled jobs left. So rather than being able to work at a low skilled job like pumping somebody's gas and filling up their tires with air (gracefully and righteously destroyed by the wonderful minimum wage), you instead don't get to learn those skills. And rather than picking up very real skills while doing this job you instead sit at home and do nothing. When people pumped gas they used to also learn about basic mechanical services for the car. And by learning these very real skills they were preparing themselves for an even more skilled job that helped people even more. They were learning skills to make more money and help more people. But the minimum wage doesn't allow this to happen.

The minimum wage no longer allows people to learn on the job skills for many low skill jobs because these jobs no longer exist. And the few that do still exist are being destroyed minimum wage hike by minimum wage hike. You can't learn on the job skills if you don't have a job. And as the minimum wage goes higher and higher the less jobs we have. So now in order to learn skills we thinking going to college will solve our problems but that's a whole other problem.

So let me get this straight... It's okay for an intern to learn on the job skills for $0/hr, but it's not okay for somebody to pump gas and learn skills for $4/hr? An usher can't learn skills and make connections at a $4/hr job? Somebody can work for another company and learn skills as an intern for $0/hr but they can't do the exact same thing for $4/hr.

Makes sense on Planet Earth.

I really think the minimum intern wage should be raised!! $0/hr is much too low for these people! They shouldn't be allowed to be exploited! $0/hr is not a living wage. Oh, what's that? They're doing it for the skills? I DON'T CARE!! They can't live on $0/hr. What's that, they're living with their parents? I DON'T CARE!! They have to do what I tell them they can do. If people want to learn skills for free that is wrong! They are being exploited! They need to make the decisions I tell them to!

The minimum wage creates more time doing non-productive things

So rather than allow people to learn skills and develop themselves at a job they instead go unemployed and have lots of time to do absolutely nothing. And while they do nothing they are now doing non-productive things like playing Xbox, experimenting with mind altering drugs, keeping up with the Kardashians, going on welfare or looking for a gang to join.

People that are not working because a job meeting their skillset (none) no longer exists ultimately end up doing things that are less productive than the job. When you're working at a low level job you're still learning social skills and some type of craft. You're still getting basic skills that you need in order to move up in the real world. But rather than give people this opportunity we instead destroy it with the minimum wage and let them get back to something far less productive like sitting home and chatting with their friends on Facebook about how the rich hate poor people.

The minimum wage makes everyone's life worse as a whole

Because of the market distortions the minimum wage creates it makes everyone's life worse as a whole. Rather than letting markets and resources act in their most efficient manner we instead create distortions by forcing our bad ideas on smart markets. So now rather than having markets that raise our standard of living by operating with the most bang for the buck we instead have markets that are over-compensating for less employees, less work being completed, pockets of nobody to fill a need and on and on.

If we just let markets act freely we would continue to have the innovations and tools that make our lives better. We don't get iPhones, cars, houses and all these things by telling other people how to run their jobs. We get them by giving people the freedom to do whatever they want to do. When you let people do what they want to do they will allocate their efforts most efficiently. When you try to tell businesses what to do you will just slow down the process of them giving us nicer things and making our lives better.

Rich people already live pretty good lives. And poor people would live much better lives if they just let businesses do what they do. But instead they want to act as cannon-fodder for the political handlers who fool them into thinking that the minimum wage will make their lives better because some rich person is exploiting them and not paying them a living wage. Alright, fine, keep hurting yourselves.

Low skilled jobs are not designed to support a family

You're not supposed to support your family on a low skilled job. You're not even supposed to have a family until you're ready to support them with a higher skilled job. Why do I even have to tell you this?

Ironically, if it wasn't for things like the minimum wage our standard of living would be really high and we would be able to support families off of low skilled jobs. But that's another topic that requires an IQ a bit higher than 85.

People who champion the minimum wage are greedy

The minimum wage is only about greed. Rather than get what they're worth people are greedy and want more. The politicians know this and the people are greedy and want more. It's a great team: greedy poor people and politicians who survive on the support of poor people.

People are paid what they're worth. If you want to be paid more than what you're worth then you're being greedy. If you're only worth $8/hr and you think you're worth $15/hr then you're greedy. If people really aren't greedy and really are worth a higher wage then you can start a company and pay these people more to make use of these high skilled workers who are unfairly underpaid by stupid businessmen who don't quite get it.

But wages need to keep up with inflation!

Why do we even have inflation? Inflation is an increase in the money supply. We have inflation because our money is debt and is loaned into existence and requires more money to be created to pay off the debt on our current money. Since nobody understands this they think inflation is a normal and good thing when in reality we should be having deflation. We want things to become less expensive over time, not more expensive over time.

So as our purchasing power goes down while more money is loaned into existence we think that things are becoming more expensive out of some type of natural supply and demand process. And because of this incorrect thinking we think that we have to have a wage that keeps up with this artificial climb in prices that is the result of the Federal Reserve. Talk about ignorance on top of ignorance. But since people don't know the first thing about money of course they're going to think that inflation is normal and good and that wages and inflation are somehow tied together. They're not.

How do you even know the right minimum wage?

The minimum wage is arbitrary. Right now $15/hr seems to be the right minimum wage for this time. That sounds nice and pretty. But why not $15.01? Why is $15/hr the magic number? What factors went into this number? How is this number calculated?

If $15/hr is good then surely $30/hr would be even better for poor people. Why not raise the minimum wage to $100/hr so that everyone is making at least $100/hr. If there are no negative effects why stop at $15/hr? But of course people think there is some kind of magic number that there should be for a minimum wage.

Conclusion

These are some of the reasons why the minimum wage hurts poor people. This is how it always goes in the world. People that are stupid end up being used to hurt everyone. That's how politics works and the people love it. Everyone would much rather be equally poor and enslaved than have it to where we all lived a high standard of living with disparate levels of wealth.

It's sad because poor people are the people who are in favor of minimum wage and they are the ones who get hurt the most by having a minimum wage. But it's pretty hard to convince somebody of a truth when they have been trained their whole life to believe the BS story fed to them by politicians and the media. So keep destroying yourselves I guess. After all, poor people have no free agency and their choices are the result of their environment, oh wait...

 Filed under: Politics / Government, Greedy Poor People, Problems With Logic, Math Deficiency, Toddler Solutions

About The Author

Quinton Figueroa

Quinton Figueroa

Facebook @slayerment YouTube

Los Angeles, CA

I am an entrepreneur at heart. Throughout my whole life I have enjoyed building real businesses by solving real problems. Business is life itself. My goal with businesses is to help move the human ...

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4 Comments

Sean: Minimum wage vs Inflation

I am not an hourly worker. I am a Military Service Member, and I work for a salary. I just wanted to say, I would love it if you did a video or an article on how military pay raises are not keeping up with inflation which is essentially reducing our pay, while cutting eligibility for retention in the services. I don't think this is a "niche" topic. I think it's one that most Americans don't understand, and needs to be spoken to.

Nam: Furthermore, consider that I

Furthermore, consider that I would pay $4/hr for someone to come to my house and clean it for 60 minutes.
Consider the amount of jobs you would 'give' to other people if you could pay less.
Design a cool-looking site for me.
Make a game..
etc
etc

Jamie: It is hard to figure out where to allocate money...

When people learn basics of physics they know that the real world is not frictionless spheres in a vacuum.

One of the big problems I see coming up with economics is it's taught in a way that tends to obscure the simplifications. And the introductory information is all geared towards micro econ. Which leads to a lot of people who think they know exactly how we ought to allocate money effectively, manage the budget, what the ideal ratio of GDP to debt is.

Most introductory micro econ is taught against supply and demand curves and covers ideas that feel intuitive and settled. And lots of people are exposed to the basic ideas, without ever gaining an appreciation for the simplifications.

There's very little popular understanding of the difference between the country's budget and your family's budget. Or why a gold standard would go badly. (Simplified micro-econ explanation: there's increased productivity every year, but a roughly fixed amount of gold. Runaway inflation is a problem we hear about - people with wheelbarrows of money - but deflation is an economic disaster as well.)

Newtonian mechanics are very useful, and all most of us ever can or should worry about. The average entrepreneur isn't an economics expert. It's a different skill-set entirely. And, well... the economists of the world make a living off the idea that they have a useful expertise (besides supervising grad students who may speak some English and will bore the crap out of a classroom).

People who run businesses, even successful ones, don't necessarily know that much more about how to allocate money than the people who work for them (and restaurants go under pretty regularly - as do franchise locations - at least in my experience it's unwise to assume - by default at least - that the owners are successful or will be there in a year). Even more important to remember is that the econ 'experts', for all their degrees? Might be getting it horribly wrong as well: http://www.bloomberg.com/news/articles/2013-04-18/faq-reinhart-rogoff-an...

Stepping back for a moment: of course $15 isn't the right number across the board. Some cities have much higher costs of living (living in the midwest and getting paid for contract work by folks in CA can get pretty sweet if they don't adjust). Slogans are about marketing, and that didn't stop being true simply because no one is making a widget or selling training.

It might be worth taking a moment to consider what actually happens with rising wages. It's far more complicated than your hypothetical, and the outcome is perhaps counter-intuitive. (Although it helps to add in the cost of hiring and training each person, as well as he relatively high replacement rate.)
http://fortune.com/2016/03/09/mcdonalds-wages/

Personally, I'd like the people who make my food to be able to take sick days.

In other cases my biggest objection is that wages are kept artificially depressed via encouraging employees to depend on benefits like food-stamps while deliberately holding them under full-time employement (allowing for further rent-taking behavior at the top, as well as the viscious cycle of a town where people employed at Wall-mart can only afford to shop there. The local entrepreneurs and business owners go out of business...

MarvinJonesEsq: Excellent article. I would

Excellent article. I would like to add that the minimum wage laws are even more devastating and onerous to the black culture and that it should be abolished immediately. It is an absolute scandal and travesty. We start by destroying the family with welfare, then we give black kids poor schools, and then we discriminate against them by not allowing them to work for what they are worth in the market place.

A 16 year old kid is typically not worth $15 an hour as he has no skills or experience. This has led to black teenage unemployment skyrocketing, but more importantly these kids don't get the skills and on the job training that would help them succeed in life.

Abolish the minimum wage now.

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