"Minimum wage requirements play a key role in youth unemployment," said CF&P
Foundation President Andrew Quinlan. "These laws effectively cut off the lowest rungs of the economic ladder."
"Unemployment rates are very high, especially for young people and minorities, in large part because of a 40 percent-plus increase in the minimum wage in recent years," added Dan Mitchell, Cato Institute Senior Fellow and Chairman of CF&P. "While in the Senate, Obama voted for that job-killing policy, and it is poetic justice that he is now
dealing with the consequences."
Minimum wage laws seem like a good idea, but arbitrarily mandating a certain wage can have terrible consequences. Business are not charities, so if the minimum wage is set above the market level,
this eliminates job opportunities – particularly for the less fortunate members of society. Since employees and employers should have freedom of contract, the right minimum wage is zero.
This new video is part of CF&P's Economics 101 video series, which is designed to explain free market concepts, with
particular emphasis on reaching students and young people. This is the seventh video in the Economics 101 series.