I was pondering minimum wages while washing my car today, and it hit me. I have not seen it considered, at least in what I have read on Austrian Economics, that minimum wage laws not only breed unemployment, but they are also a force for the passing up of productive efforts all together. For example, an entrepreneur may figure the costs of everything, and conclude that as long as his labor cost is <x he will make a profit. If minimum wages are high enough to make his <x labor cost unrealistic, he will not pursue the opportunity. ex; if say the UAW pushed wages for all car manufacturers up to 1 million dollars an hour, it is safe to say nobody would build cars. Just food for thought... I have not seen this discussed. What are your thoughts?
I think what happens is that entrepreneurs adapt and use less labor in their projects. The minimum wage and other labor regulations generate a bias against employment and a higher demand for capital compared with the absence of regulations. Who is more likely to own capital? The rich or the poor? So those who say they defend the poor by introducing minimum wage laws and protective labor regulations are producing a series of negative consequences for that group.
Libertad o Muerte, Jorge.