Economic system is a self-evolving system. Nobody has designed it. Leftist thugs cannot grasp the concept of self-evolving systems, though they claim that there is no God. They claim that there is no God so nobody has designed the world, but at the same time, the rich have designed it to their advantage, and the Leftists will take it apart and redesign it in a better way. Human body, or body of the living organisms in general, is another example of self-evolving system, as any biologist would tell you. The biologist will also tell you that you cannot take apart the body of a living organism and reassemble in a better, or even same way, as it is self-evolving. If somebody throws a wrench in a self-evolving system, like mandating minimum wages or minimum support prices, result is the same as somebody throwing a wrench in a running car engine: the system gets destroyed.
Let me illustrate with a simple example:
Suppose in an economy, 100 articles are produced every year. One of the businesses B1, produces 10 articles out of these, and its owner earns 100 rupees, pays 80 rupees as wages, and keeps 20 rupees to himself. Wages of all the employees of this business are equal, and are less than all other workers of other businesses.
1. Enter the Leftist the thug. He forces government to raise the wages of these workers to some higher level, so that the new wage bill is Rs 85. Owner raises the price of articles to 105, pays 85 as wages, and keeps his 20 rupees. Since the articles of business B1 are now costlier, they are purchased less, and so he lays off some workers. Unemployment has increased.
2. Suppose the Leftist the thug also forces government to mandate that the owner will not increase prices. So he gets to keep only 15 rupees. But with his 20 rupees he was buying jewellery for his wife, and also a private jet for her. He will forego either jewellery or the jet, rendering either the jeweller or the jet maker unemployed. Unemployment has increased in the economy.
3. Suppose the owner was real miser and was keeping his 20 rupees in tijori, all of them, leaving the wife crying and cribbing. Now he gets to put only 15 rupees in tijori. So, the workers now have 5 rupees more than before, so they will buy more than before those articles they crave more, leaving less of those articles than before for the remaining workers of the economy. But remaining workers still have the same money as before, so they get to buy less of the more craved articles with the same money. This is called inflation, महंगाई। So they will readjust their purchases and will buy less of the articles they crave less than more craved articles, rendering workers of those businesses unemployed. Unemployment has increased. जी, सेठ की तिजोरी लूट कर ग़रीबों में बाँट देने से केवल महंगाई बढ़ती है।
This is a hypothetical economy. But in the real world also, minimum wages mandated by government have always led to unemployment, in all countries, for the reasons explained above which hold good for the real world also. But minimum wages are being mandated all the time, because the Leftist the thus the infantile doesn’t grow up, ever. Destroying economies, destroying lives, and countries.
But what about the rich poor divide then, you may ask. Suppose in another economy, again 100 articles are produced. There are only two persons in this economy: Mr Rich and Mr Poor. Distribution of production is such that Mr Rich gets 80 articles, and Mr Poor only 20 articles. Enter the Leftist the thug the infantile. He forces equal distribution. And lo, next year Mr Rich produces only 50 articles, the numbers he gets to keep. Why will he produce for confiscation? Why? So the economy now has only 70 articles produced, and the country has become poorer.
So what is the way out for Mr Poor? Suppose he is intelligent. He goes to Mr Rich and explains to him Ricardo’s law of Comparative Advantages. They both go for division of labour. As a result, production increases to 400 articles, but there is no Leftist the thug the infantile, so the distribution remains same as before, and Mr Rich gets 320 articles, and Mr Poor gets 80 articles. But, wait, isn’t the guy with the 80 articles Mr Rich? So, the poverty has disappeared from the country! Unless you are a Leftist thug, how does it matter to you what Ambani has got so long as your Maruti 800 has grown to Mercedes E class? How? How does it matter to you what others have got if you are not living your life in comparison with others, instead of living your life? Does Antilla matter to you? Have you even seen Antilla or Mr Ambani? If your hut has grown to a six-bedroom house, how does it matter to you what is the height of Antilla?
In fact in the real world, it is highly likely that your son will be next Mark Zuckerberg or Steve Jobs, and will beat the height of Antilla also, so long as there is no Leftist to distort his mind in the jealous, envious rage against Mr Ambani. (I wrote son, not daughter. So, does some leftist want to call me misogynist? Go ahead, ***k yourself, you infantile, I don’t give a damn.)
This is the story of minimum wages or minimum support prices. They may enrich a small section of population in short term but impoverish the country for sure in the long term, and soon the group that initially got enriched also gets impoverished.