I am a college student, and therefore likely to work some low-wage jobs over the next few years. Many Americans think that a higher minimum wage could benefit workers such as myself, but past precedent and straightforward logic show that raising the minimum wage actually hurts many low-wage workers. In order to truly open the doors of opportunity for young Americans, the American Congress and state legislatures should instead seriously consider decreasing the existing minimum wage.
Consider this: in a country without wage laws, employees can only be hired if both employer and employee freely agree on a wage to be paid. Employers are willing to hire more workers at low wages, whereas more workers are willing to be employed given high wages (not very surprising). Somewhere in the middle, there exists a sweet spot, or equilibrium wage, where the number of willing workers matches the number of employees wanted by an employer. Wages will gravitate toward this level in a free market, as businesses strive to attract talented workers without going broke from excessive labor costs.
Notice, however, what happens when the government imposes a minimum wage. If the minimum wage is above the equilibrium wage described above, there will be more people seeking work than employers are willing to hire. Unemployment will rise, with many people willing to work but prevented from working, simply because their skill set cannot justify a high wage. Simply put: if a person’s skills are worth $6 an hour in the unrestricted market and the minimum wage is $8 an hour, that person will likely go unemployed as companies weigh their costs and benefits.
Now, some workers certainly will benefit from an increased minimum wage. If a worker is deemed skilled enough by their company to keep their job, they will enjoy higher pay and less competition for their position. The negative trade-off, however, is the very real pain for those who lose their jobs. Ironically, politicians often promote minimum wage laws in the name of helping the poor, when in reality the poor and uneducated suffer the most from unemployment caused by minimum wages. Skilled, educated workers generally come out as winners at the expense of the poor.
Many young people today simply do not have the skills to merit high wages. However, this does not mean that they should not be hired- they should simply be hired at a wage appropriate for their skill level. By decreasing the current minimum wage, American legislatures can provide more youths with opportunities for productive employment. A few years of job experience will likely prepare these youths to take on higher-paying jobs, but only when they have the real-world skills to compete for them.
Thus, to benefit young workers and give them the broadest range of economic opportunity, America needs to rethink its stance on minimum wages. There exists no “right” to any specific dollar amount of pay, but we must defend the real right of Americans to work using their own skills and talents, at any wages acceptable to both employer and employee.