Higher Minimum Wage - Bad Idea

Here is a real-world example of what happens when government tries to interfere in business (from the Economist.com):

Referring to the riots in Tonga: “Agitation by civil servants forced the government to raise public-sector pay by a massive 60-80% last year. But this placed unsustainable pressure on the government's finances, eventually requiring the administration to counter the pay rise by cutting the number of civil-service jobs.”

When you force wages to go higher than the market dictates this is what you get – higher unemployment. Why is this such a difficult concept to understand?

When you include tip income, less than 1.1% of all workers earn the minimum wage or below. Without tip income, it increases slightly to about 1.5%. Those earning only the minimum wage tend to be young. According to the Department of Labor, 53% of those minimum wage earners are between the age of 16 and 24. The picture of the typical minimum wage earner is something like this: white, female, working part-time, family earns about twice that of the poverty line. But to hear the Democrats tell it, raising the minimum wage will wipe out poverty or some such – ridiculous!