I was recently involved in a minor debate over the minimum wage and this inspired me to write a bit about the matter. I have worked a few minimum wage jobs and I must say I prefer my current employment to all of them.
There are various stock arguments against the minimum wage. I will not consider all of them, but commentators can feel free to bring up their favorites.
One main argument against the minimum wage is that the government should not have the right to tell corporations what they can or cannot pay people-this should be set by the market and is a matter of freedom. This does have some appeal, but can be countered.
One counter is that just as the state has a legitimate role in protecting citizens from criminal elements who would harm them and take from them, the state would seem to have a role in protecting citizens from financial exploitation. Allowing businesses to pay people whatever they wish with no lower limit would certainly seem to open the door to terrible economic exploitation that would seem comparable to legalized theft. After all, the businesses have a significant advantage in power-somewhat like an armed criminal has an advantage over an unarmed citizen. Naturally, those who claim that the state has no duty to protect the citizens would not accept this sort of reasoning, nor would those who contend that the state should serve the interest of business people over the interests of the other citizens.
Another counter that is limited to certain contexts is noting that the state sets limits on freedom and many of the folks who argue for freedom for businesses are the same folks who argue for various restrictions, such as banning same-sex marriage or marijuana use. However, if the state should not interfere with business decisions about pay, then the same principle of non-interference should also apply consistently across the board and thus would seem to entail that the state should not interfere with what people wish to do in their bedrooms (be it same sex activities or pot smoking). Unless, of course, it is argued that business people are entitled to a special category of liberties and other citizens are to be subject to regulation by the state.
A third counter is that while the free market is a spiffy ideal, the reality is that the market is far from free. Rather, it is dominated by established players (who have crafted the legal rules of much of the game) and, as noted above, the employer has the power over the employee. As such, an appeal to a free market is largely on par to an appeal to Santa Claus or the Tooth Fairy-there just is no such thing.
A second common argument for getting rid of the minimum wage is that it causes job loss. After all, a business that can pay an overseas worker a pittance or use a robot to do a job for less than paying humans minimum wage will go with the more lucrative option-and wisely so. If business could pay Americans $1 an hour or less, then they could leave these low-paying jobs here and provide Americans with a taste of the third world.
This does have some appeal. After all, keeping the money (however minimal it might be) in the United States would presumably be better for the United States. There is, however, the question of whether such grotesque exploitation is morally justified or not. My inclination is, of course, that the mere fact that a company could get away with paying so little does not entail that it is right or permissible to do so. After all, the folks paying out these pittances would probably agree that it would be wrong for a stronger organization (a state, for example) to use its power to exploit them-even if they could get away with it. As I see it, using superior power to unfairly extract value from a person is theft, whether this is done by an armed robber, a business or a state. As such, a minimum wage serves for the poor what a tax cap does for the rich-it is supposed to provide some protection from being robbed by a greater power.
As a final point, it is worth considering what some folks say about CEO compensation in this context. It has been claimed that CEOs are entitled to their pay because 1) they earn it by the value they contribute and 2) getting the best people requires paying well. This same line of reasoning should apply across the board. So, if a CEO should be paid based on what s/he contributes, the same should be true of all workers. Also, if companies expect people to do good work, then they should pay well-be it to get good work from a good CEO or from the lowest worker. Of course, the principles seem to somehow change when certain folks switch from talking about the rich to talking about the poor.