Reducing Poverty by abolishing minimum wage

Reducing Poverty by Abolishing Minimum Wage

One of the many ways to ease poverty is abolishing minimum wage. I know what you’re thinking – “this sounds crazy” right, well, I’m about to explain how allowing a free wage market will help reduce poverty.

In a free wage society everyone would get paid what they are worth, their labor would be purchased by corporations at the real wage price. Free wage price is the ratio of productivity VS. The value of the goods being produced, without interference of a government price floor. This gets complicated to explain so bear with me for a couple of paragraphs.

First off, the lower the wages paid the lower the price of the goods being sold. For example: I am a contract worker and my job is to hammer in the nails of a house being constructed. My job is simple and doesn’t require much skill, I hammer in nails, I am good at what I do; let’s say my wage is 3$ an hour. Now, the house is cheaper because the contractor is paying me less and charges less for the construction of a house. People get their home for less. Those people with reduced costs in buying a home can invest more and work for less themselves.

The results of a free wage market can be seen as Disposable income increases, money for investing increases, a desire to work for less money increases; why, because a house was cheaper – because a worker was paid 3$ an hour. What this does for the economy is create more jobs and more sales of goods thus lowering the prices on all consumer goods. Poverty is reduced.

Mathematically it is fact and can be calculated. The increase in supply and the increase in demand will shift allowing for more goods to be sold at cheaper prices. A graph can be composed to show this as simple supply and demand curve shift.

Adding to those circumstances, Is the fact that all goods would become cheaper even more so because of the lower wages paid. 3$ an hour now becomes worth 10$ an hour and with the added benefits that more people have jobs, homes, and investments. Poverty is reduced even further.