Thursday, September 4, 2014

The Unseen Costs of the Minimum Wage

The article titled, "The Unseen Costs of the Minimum Wage " by Josh Grossman  from Mises Daily, explains the "seen" and "unseen" costs of minimum wage laws. It is a form of price control, as it shifts and alters the supply of labor in the marketplace.

A Key excerpt:

"By raising wage rates, the public can see their states’ minimum-wage earners making more money. This is the factor that is seen. What is unseen is the number of jobs destroyed or citizens who would have been able to obtain jobs if the minimum wage were never raised in these states in the first place."

Davis-Beacon Act of 1931 is an example of a special type of minimum wage act, as it make it more difficult for lower skilled laborers. A video explaining this:

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