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Peter Schiff : How does a minimum wage requirement impact an economy? / Clear, concise arguments and answers from leading thinkers / Eristical.com
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Peter Schiff

A minimum wage law hurts the poorest and least skilled the most because its deprives them of employment opportunities. If a young person, for example, doesn't have any skills to justify being paid the minimum wage rate, he or she will have a difficult time landing a first job. And when it is more difficult to find a first job it will be more difficult to find a second, third or fourth job, which traps a person in poverty.

Decades ago, young people were employed as pump jockeys by gas stations to pump gasoline, wash windows and check the air pressure of tires. Between performing these services for customers they would help mechanics to repair and service vehicles so that after a few years, those unskilled pump jockeys would be trained auto-mechanics without their ever needing to attend or pay for school. These skills were then used as a springboard to open new gas stations or body shops from which they would employ others.

A minimum wage law also hurts a society because it results in capable, able-bodied people sitting idle rather than working. The effect of the squandering of these labor resources can be seen, for example, in movie theaters. Because employing a person at a minimum wage rate to operate a concession stand cash register costs so much, fewer people can be employed which results in longer lines and higher prices to cover their wages. In fact, a vast number of jobs and conveniences no longer exist precisely because of minimum wage laws, ranging from hotel porters to gasoline pump attendants to movie theater ushers.

Economist, investment advisor, author and commentator, Peter Schiff