Very interesting topic. The minimum wage should be abolished immediately. It hurts those it is supposed to help. Maybe the lucky few get $7.25 per hour instead of something less. But many others get zero per hour, because they don’t get hired in the first place. Have you see the teen unemployment rate lately? It’s 24%, according to Forbes (http://bit.ly/eoB4t). At $7.25 per hour (or more in many states), employers are finding alternatives or doing without. (And by the way, the majority of minimum wage earners are teens.)

You are correct to point out some of the flaws of the minimum wage. The biggest flaw, though, is that it arbitrarily prevents employers from paying their employees what they are really worth. Therefore, the employers end up not hiring the employee at all.

Here’s a real-world example. As you may remember, I worked at Pepsi for many years. Pepsi has factories around the world. In the countries with high labor costs, such as Western Europe, Pepsi installs more expensive highly automated equipment, reducing the need for costly labor. In the low labor cost markets, such as many third world countries, Pepsi uses inexpensive low-technology equipment because it can afford to hire people to handle the otherwise automated tasks. The cost of labor matters.

If I want to hire someone for $5 per hour, or even less, and that person is willing to accept, why shouldn’t that be permitted?

Sure, it would be great if everyone could make $50,000 or $100,000 a year. It would be great if I could buy a new Mercedes for $10,000, too. That’s not how prices are set.