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$8 an hour (which it is in some states), then anyone who does not produce at least $8 of value in a single hour is unemployable. If a company employs 100 people at $8/hour, then those people have to be producing at least $800/hour of value in order for the company to break even just on employment costs. If employment is only half of the cost of production, then they have to produce $1600 of value for every hour that they're on the job. If minimum wage laws really worked, then why not just raise the minimum wage to $50,000 a year, and then everyone can have enough money to live on? The reason is that anyone who didn't produce that much value would not be able to find a job. If the minimum wage is increased by 10%, and a business wants to maintain the same level of profit, they have to raise the prices of their end product by at least 10%. But, since their suppliers also had to raise prices by 10% to cover their increased labor cost, they really need to raise their prices by 20% to maintain the same profit. So, that 10% wage increase suddenly buys 10% less than the old wage did.

If someone is working at a company and being underpaid for the value that they are creating, they have the option to find employment elsewhere. If another company sees that someone is producing $50/hour of value, but only being paid $15/hour, then that company may then offer that person $25/hour to change companies. If someone is only producing $4 of value but being paid $8/hour, then that person will likely get a pay cut or be let go for someone who produces more value per hour. If no one can produce that much value per hour, than the company will either raise end prices to get more value per hour, or lower wages. If that company is not allowed to lower wages, then they will either be forced to raise end product prices (which may harm their business by lowering sales, or harm consumers by making a necessity more expensive), or go out of business, leaving their entire work force unemployed. Most people would rather be paid $5/hour then nothing at all. If an employee is able to increase the value that they are offering to a company, they will either be given a raise based on that value or they will be able to get a better job somewhere else. This keeps wages in line with what a worker deserves, and open competition prevents most companies from taking advantage of their workers.

In a true capitalist society, inflation does not exist. There are fluctuations in price (both up and down) over

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