Why Is The Minimum Wage A Bad Idea?

According to the Chicago Sun-Times, President Obama has committed himself to forcing the minimum wage up through federal intervention. If he becomes successful, it will only cause harm to the economy, resulting in higher unemployment and less advancement. As I do my research I find that there are a few reasons as to why the minimum wage issue is a bad idea. Minimum wage may have an unfavorable effect on new candidates to the workforce. Those who do not have enough to too little work experience may be influenced to work for less than the existing rate. When a minimum wage is enforced, it becomes more difficult for young and inexperienced workers to find employment, as they are relatively less desirable than more experienced candidates who could be employed for the same earnings. The result is that young people do not have the opportunity to develop their human capital for the future, permanently disadvantaging them in the workforce. The minimum wage takes workers’ dignity and denies them valuable development for the future. Politicians have transformed the minimum wage into an indicator of social development. Governments often cite their raising of the minimum wage as an example of their commitment to fostering social
During such times, raising the minimum wage has no effect other than being a useful political move. In times of economic contraction, firms close and lay off workers and unemployment rates rise. In such times, the minimum wage hampers the market from clearing, keeping more people out of work than necessary. For markets to function efficiently, wages must be allowed to fluctuate freely, equilibrating with demand for labor and reflecting the macroeconomic situation. Minimum wages tend to lock in wages at pre-recession levels making countries less competitive and less quick to recover when economic downturns