My argument against the setting of minimum wages by governments is simple: minimum wages destroy opportunity for both individuals and businesses by pricing some labor out of the market. I speak from experience as the owner of two nutritional supplement companies in Washington state. In this state, since 1998, the minimum wage has increased each year by being indexed to the CPI, the Consumer Price Index. As of January 1st, 2007, the minimum wage here jumped up to $7.93 per hour. What this has done is remove the ability of private parties to freely contract, to buy and sell each other's services at prices both deem good, which may be perceived by both parties to be worth less than the current mandatory minimum wage. The following is a brief description of the relationship between this form of government meddling in the economy, my companies, and the people who could have worked for us.

My companies have a few duties that we could hire someone to complete each day.

The problem is, the types of tasks involved are not worth $7.93 an hour to have someone else do them. Something closer to $5 an hour would make it more worth our while.

However, the government has seen fit to step in and not just prevent us from paying someone less than $7.93 an hour; the government has also prevented willing, private individuals from freely contracting with us for work such a person might be happy to do for $5 an hour.

Minimum wage laws are a double-edged sword that slices both ways, in this respect. Most people only see it as something that businesses must simply shoulder. They fail to think of people who would willingly work for less than the mandated minimum wage, if they found the trade worthwhile, who instead simply do not have the option (and fewer options for work overall!).

Consequently, the other executives of my companies and I have not and will not hire someone else to do these particular tasks for us. At $7.93 an hour (and closer to $9.30 per hour in costs to our companies after payroll taxes are factored in), it makes sense for us to do it all ourselves and hire no one. Our companies could create several jobs, but with this government interference set to destroy our profits if we do, we have chosen to create no jobs.


Minimum wage laws do prevent the creation of new jobs and they destroy opportunity. Mine is just one story, but it is far from being an uncommon story. The poor cannot benefit from minimum wage increases if they cannot work in the first place; one-hundred percent of zero is not a benefit to anyone. Though some jobs might pay very low wages without minimum wage laws, a person can learn skills doing such jobs that they can leverage to move up the wage scale elsewhere. Without access to a job in the first place, however, this simply will never happen. Keep these points in mind should you be tempted to support such disastrous economic policy, or when you hear people advocating for it.

Learn more about this author, Paul E. Zimmerman.
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