Zerohedge and other economic globalists don’t understand the real benefit of minimum-wage laws:
Most of our readers probably know what we think of minimum wages, but let us briefly recapitulate: there is neither a sensible economic, nor a sensible ethical argument supporting the idea.
Let us look at the economic side of things first: for one thing, the law of supply and demand is not magically suspended when it comes to the price of labor. Price it too high, and not the entire supply will be taken up. Rising unemployment inevitably results.
However, there is also a different way of formulating the argument: the price of labor must not exceed what the market can bear. In order to understand what this actually means, imagine just for the sake of argument a world without money. Such a world is not realistic of course, as without money prices the modern economy could not exist. However, what we want to get at is this: workers can ultimately only be paid with what is actually produced.
As Mises has pointed out, most so-called pro-labor legislation was only introduced after enough capital per worker was invested to make the payment of higher wages possible – usually, the market had already adjusted wages accordingly.
However, unskilled labor increasingly gets priced out of the market anyway, which is where the ethical argument comes in. If a worker cannot produce more than X amount of goods or services, it is not possible to pay him X+Y for his work. Under minimum wage legislation he is condemned to remain unemployed, even if he is willing to work for less.
In Switzerland, the unions have recently managed to get the demand for minimum wage legislation on one of the quarterly referendums in the country.
The purpose of the minimum-wage laws have nothing to do with socialism and everything to do with nationalism. This should be obvious by the at-first-glance outlandish proposal to raise the Swiss minimum wage to $25 per hour. But once you understand that Switzerland has learned from the example of the USA and the EU states and is battling to avoid being overrun by cheap-labor immigrants from Africa and Eastern Europe, and the brilliance of the political tactic becomes apparent.
The entire justification for importing tens of millions of Mexicans is the reduction of labor costs, thereby resulting in tremendous damage to the social fabric, the destruction of the middle class, and a permanent change in the political system. All of this can be avoided by raising the minimum wage to a level that ruins the value proposition of the immigrant worker to the large corporations.
As a general rule, the Swiss are among the sanest of nations. If you are asking if they have gone insane, that is a good reason to assume you are missing something. Americans who are interested in salvaging any vestige of traditional America should push hard for raising the minimum wage to at least $20 per hour.