The Effect of Minimum Wage

This article from the Houston Chronicle details the harms and benefits of raising the minimum wage. The article shows the effects on businesses, local employment, and the individuals. The author shows how raising the minimum wage would not solve the problem of poverty, but would rather add to the issue of unemployment.


  1. blackta Said,

    September 15, 2013 @ 3:16 pm

    This article made me feel as though minimum wage is a problem that will never be solved because each attempt to fix it just causes a reaction that somehow disrupts the equilibrium of the marketplace. If you raise the price, a business will outsource instead of pay workers the higher wage, simply because they are trying to make money and keep costs down. I think this is an issue that will therefore remain unsolved.

  2. David Collins Said,

    September 16, 2013 @ 3:01 am

    Minimum wage has to be looked at as a cost to employers. The minimum wage law puts a mandatory cost on all employers. If someone wants to be hired to do a small job that has a market value at 4 dollars and hour, it is mandated at 7.25 an hour (or whatever the cost may be), and has a marginal loss of 3.25 for that employer. Most employees who are benefiting from the minimum wage laws are teenagers that are just starting out in the workforce; therefore, they should not be considered under the same category as a single mother supporting 3 kids. The minimum wage law also forces employers to hire less people, since it is more costly per person. There are many more long term consequences to the minimum wage that are unforeseen in the immediate future, and the secondary consequences should be held accountable. In conclusion, I believe the minimum wage has been an economic disaster, has lead to higher levels on unemployment, and has given the federal government even more control over private business’. Milton Friedman argues that ”The effects of the minimum wage have been concentrated on the groups that the do-gooders would most like to help. The people who have been hurt most by the minimum wage laws are the blacks. I have often said that the most anti-black law on the books of this land is the minimum wage law.” This makes us pause and wonder is the minimum wage also a racist law? To keep minorities in suppression? This article only hints at the economic consequences on minimum wage but fails to address the social consequences…

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