RE: Minimum Wage

I think minimum wage needs to be analyzed in terms of economics. Three components of economics consist of production, consumption, and exchange. Wages fall into the exchange. The essence of exchange is the transfer of title. When you go to the store and purchase a product, you are transferring title of a monetary bill for that of a product. Who wins in this exchange? Both. If there were an imbalance in the perception of the price or product, the exchange would not happen. Both parties voluntarily entered into the transaction. The same can be said of wages. If an employer were to offer $5.00 an hour for some labor, it is up to the individual seeking employment to do one of two things, either accept the wage or say no, and look elsewhere. If they accept the job, you can conclude that this individual is better off than their next best alternative. If another employer offered only 4.00, the individual is free to choose that job. So how can it be considered exploitive if an employer offers an individual their best price?

While people might characterize $4 or 5$ an hour as exploitation, they wouldn’t say the same about $50 an hour. Therefore, for the most part, when people use the term exploitation in reference to voluntary exchange, they simply disagree with the price. If we equate price disagreement with exploitation, then exploitation is everywhere. For example, I not only disagree with my salary, I think I’m worth 6 figures, I also disagree with the price of a new Cadillac.

If an employer is forced to raise wages, they will do at a minimum 1 thing or all 3, raise prices, hire less people, or both.