Education Economics

Supporters of a higher minimum wage incorrectly believe that it will help teenagers and minorities. This post is a somewhat brief overview of why and how the minimum wage and the raising thereof actually hurts low-skilled workers in terms of unemployment.

When the minimum wage is raised, employers look for employees with more skills that are more productive to offset the increased cost of that labor. Thus, they hire less low-skilled workers. You see, in essence, a minimum wage law is effectively an example of a price floor. What is even less obvious is the fact that the more the minimum wage is raised, the more attractive a minimum-wage-rate job becomes to a previously unemployed high-skilled worker, decreasing the total number of available jobs even further.

Employers, if the minimum wage is raised high enough, may even go so far as to outsource labor to foreign countries, hire illegal immigrants, or pay their employees under the table.
People respond to incentives. Raising the minimum wage gives more people the incentive to disregard pursuing a valuable education. If you are a relatively productive worker, present this idea to your employer; your rate of pay may increase if he agrees.