Showing posts from May, 2007

Why minimum wage is bad for the little guy

Minimum wage and other worker protection schemes are put in place by politicians with seemingly good intentions. Even if the intentions are good, I don't believe it's good for the economy. Let me try to demonstrate: Imagine you have lost your job and decided to start a hot dog stand . You get a stand and set it up at a busy location and hot dogs sell quite well. Business is going well, but with the money you make you can't send your kids to university, so you want to start a second stand . First you have to save up for a second stand , or more likely you have to convince a bank to lend you money to buy the second stand . Then since you can't clone yourself, you also have to find someone to man the second stand . You now have a loan to pay off for the second stand , so you're a bit low on cash to pay the guy who mans the second stand . You make him a deal, you pay him very little, but for each hot dog he sells, he gets some money. He figures he'll