Minimum wage laws can hurt employment from "summary" of Capitalism and Freedom by Milton Friedman
Minimum wage laws can hurt employment. This is a concept that is often misunderstood by those who advocate for increasing the minimum wage. The intention behind these laws is noble - to ensure that workers are paid a fair wage for their labor. However, the unintended consequences of such laws can be detrimental to employment opportunities. When the government mandates a minimum wage that is above the market equilibrium wage, it creates a surplus of labor. Employers are forced to pay workers more than their productivity warrants, leading them to hire fewer workers or cut back on hours. This results in higher unemployment rates, particularly among low-skilled workers who are most vulnerable to the effects of minimum wage laws. Furthermore, businesses may also respond to an...
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