Kathlyn Hotynski

The U.S. government has come a long way from maintaining a structure of law and order in which people, subject to the forces of a competitive marketplace, can pursue their own self-interest and happiness.

Since the Great Depression, the interpretation of the Constitution and an unchecked outlook by politicians toward the role of official policy in domestic affairs has resulted in a large growth in government.

The government now has the power to coercively intervene into areas originally not delegated to it. The minimum wage, established by a Congressional initiative in 1938, is one such intervention. In addition, increasing the minimum wage places arduous controls on the free market, leads to economic disorder, and turns against the very people it is meant to help, namely the poor.

Supporters of a minimum wage hike will say the higher the minimum wage, the more prosperous workers will be. They say that an increase will make them more equal to higher-paid workers. If this is true, why not make workers even more prosperous and more equal by increasing the minimum wage to say, $15 an hour?

The problem arises when a price for something, in this case labor, is set above what market forces determine it to be. When this happens, businesses will have to reduce the number of workers they hire and the hours they ask their employees to work. When prices are fixed above the market rate, a rate set by a natural supply and demand, the artificial raise from a minimum wage increase temporarily helps experienced workers the most.

Yet, lower-skilled workers are affected negatively by an increase because they become less employable. These unskilled and inexperienced workers may not produce value in excess of their wages when an increase sets in. Therefore, these people would have difficulty finding employment, because the incentive to hire them is diminished. This makes it difficult for the most economically vulnerable portion of the population to become skilled and productive, let alone self-sustaining.

It has also been argued that businesses can absorb an increase in minimum wage. To assume that businesses can absorb an increase, even after incremental hikes, is wrong.

How can politicians, most of whom have never built a business, know what a business can absorb? John Stossel, who reported on minimum wage increase for 20/20, found that wages aren’t just money. “They are signals that guide people to where they should work and show employers how to expand. These freely floating signals deliver capital to the places where it will take root and grow.”

Stossel pointed out that this is what makes America prosperous.

Today, only 3 percent of the workforce earns the minimum wage. Along with that, two-thirds of all minimum wage workers earn a raise within a year of starting out. If these people maintain steady employment and gain experience and skill, they will move well beyond the minimum wage rate. Russell Roberts, economics professor at George Mason University, said that it is “competition for workers that keeps wages up, not legislation.” Wages are in the control of people willing to work.

Supporters of a minimum wage increase also say that it is aimed at helping the poor. It is reasonable to assume that a higher rate of pay would benefit these people. Yet minimum wage inadequately targets the poor. This is because most poor do not work for the minimum wage. In fact a majority of minimum wage earners are college students and suburban teenagers between the ages of 16 and 24. These are young people who are working for the first time and start at low wages.

The real dilemma is that most Americans who live below the poverty line do not work. More than 63 percent of poor adults did not work at all in 2005, while only 11 percent worked full time year-round. Families are poor because they do not have full-time jobs, not because they earn low wages. The intent of our legislatures in Congress is to help the poor, or at least look like they’re helping the poor, by raising the minimum wage. Intentions aside, the poor are ill-targeted and not affected by a raise.

The United States owes its prosperity to people who are willing to take a chance, work hard and pursue their dreams. It is people who create wealth and jobs, never the government.

Recently, the U.S. House has approved a 41 percent increase of the minimum wage. This is expected to pass in the Senate and be signed into law by the president. This shows us that politicians are not economists, but instead they desire to hold on to their jobs by enacting popular yet harmful laws. This consequently disregards the basic principles upon which our country was founded, principles that have made our country great.

Herro is a senior political science major and columnist for The Spectator.