The real tragedy of minimum wage laws is that they are supported by well-meaning groups who want to reduce poverty. But the people who are hurt most by higher minimums are the most poverty stricken.
Interpretation
Minimum wage laws aimed at reducing poverty can inadvertently harm the very people they intend to help.
Milton Friedman argues that minimum wage laws, while supported by good intentions to alleviate poverty, often lead to unintended consequences that can worsen the economic situation for those they aim to assist. The increased wage floor may lead to fewer job opportunities for the most impoverished individuals, illustrating the complexity of economic policies where well-meaning interventions can sometimes create more harm than good.
In practice
During a discussion about economic policy, one might quote Friedman to illustrate the unintended consequences of minimum wage laws.
The economic miracle that has been the United States was not produced by socialized enterprises, by government-unon-industry cartels or by centralized economic planning. It was produced by private enterprises in a profit-and-loss system. And losses were at least as important in weeding out failures, as profits in fostering successes. Let government succor failures, and we shall be headed for stagnation and decline.
Universities exist to transmit knowledge and understanding of ideas and values to students not to provide entertainment for spectators or employment for athletes.
There is no place for government to prohibit consumers from buying products the effect of which will be to harm themselves.
There is one and only one social responsibility of business - to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.
The great danger to the consumer is the monopoly -whether private or governmental. His most effective protection is free competition at home and free trade throughout the world. The consumer is protected from being exploited by one seller by the existence of another seller from whom he can buy and who is eager to sell to him. Alternative sources of supply protect the consumer far more effectively than all the Ralph Naders of the world.
The strongest argument for free enterprise is that it prevents anybody from having too much power. Whether that person is a government official, a trade union official, or a business executive. If forces them to put up or shut up. They either have to deliver the goods, produce something that people are willing to pay for, are willing to buy, or else they have to go into a different business.
The powers of financial capitalism had a far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences.
Economic growth is very important, but it is not the only thing, and it must be accompanied by sharing with those who are left behind, through effective social services and provision.
Landlords grow rich in their sleep without working, risking or economising
Zoning laws making housing more expensive? That's less of a problem with a universal basic income and more of a reason to put money directly into people's hands.
Wherever there is great property there is great inequality. For one very rich man there must be at least five hundred poor, and the affluence of the few supposes the indigence of the many. The affluence of the rich excites the indignation of the poor, who are often both driven by want, and prompted by envy, to invade his possessions.
Just as we should never balance the budget on the backs of the poor, so it is an economic delusion to think you can balance it only on the wallets of the rich.
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