The Minimum Wage and Social Security are Bad for America :: Minimum Wage Essays

"A close examination of America's unemployment rates suggests that minimum wage laws deserve a big share of the blame. Businesses are not charities, they only create jobs when they think a worker will generate net revenue. Higher minimum wages are especially destructive for people with poor work skills and limited work experience." -- Dan Mitchell, senior fellow, Cato Institute. In Henry Hazlitt’s book Economics in One Lesson, he explains some basic differences in which a good economist is separated from a bad economist. Hazlitt conveys that, â€Å"the art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups† (Hazlitt, 2)1. Hazlitt’s theory that the â€Å"bad† economist looks only at the immediate impact of an act or policy and does not evaluate how it effects all groups in the long run, goes hand in hand with the law of unintended consequences. The law of unintended consequences can be described as, â€Å"actions of people, and especially government, always have effects that are unanticipated or unintended† (Norton).2 In other words when the short run effects on one specific group is all that is taken into consideration, down the road consequences that can affect other g roups will arise. One thing is for certain; unintended consequences come forward in the long run in all facets of the economy. In many ways economics is a balancing act, and with any policy or act somewhere down the road consequences will show themselves that were not necessarily intended from the get go. One economic policy that proves to show unintended consequences over time is the raising of minimum wages in the workforce. The immediate impact that takes place in some economist’s eyes is the fact more money is being placed in the pockets or lower income struggling households. However, looking at it this way causes the unintended consequences to be overlooked. Furthermore, in the long run a large hike in minimum wage would actually cut jobs, thus putting those looking to benefit from a higher hourly wage out of work. As explained here, â€Å"Duke researchers have found that after an increase in the minimum wage, the least skilled 3 employees are crowded out of their jobs as better educated teenagers are drawn into the work force† (McDonald).4 Now the same employees and families who were targeted to benefit from a minimum wage increase our now suffering.