The economy is a constantly fluctuating curve of actions and reactions. There is a constant fluctuation of how much is spent, and in return, how many people are employed. The economy is such a broad and fascinating subject that whole classes and degrees are offered on it, mainly the capitalist economy. Capitalism relies on the interaction between buyers and sellers, and not just the positive interaction. Capitalism relies just as much on the negatives of these buyer-seller relationships as it does on the positives of the aforementioned relationships. If a seller wants to charge too much for the product, i.e. more than the seller wants to pay, they will quickly realize that the price is too high and that a price change is necessary. Supply and demand is a simple concept that is often forgotten in today's world, because of the integration of socialistic policies into our government and economy. Simple supply and demand is a policy that can and should be understood easily, but is frequently not even thought of. Supply and demand basically states that the supply of most things is limited, whereas the demand can go on to infinity. This is not to say that demand is infinite and will never end, because demand does have an upper limit that can be reached and not surpassed, but is to say that demand can go much higher than the available resources of most supplies will allow it to go. This creates the perfect opportunity for a capitalist market, in which both the buyer and seller are acting in their best interests. The buyer acts in his/her best interest by finding the object for the lowest price, while the seller acts in his/her best interest by trying to sell it at the highest level of profit possible. These points meet somewhere on a graphed curve, and this is called the market equilibrium price, i.e. the best price for the item to be sold at. This "equilibrium point" takes into account that the supply is limited, and that the personal utility of such items may diminish after time, and therefore make demand go way down.
This principle applies to the labor market as well as it applies to the apple market, or the t-shirt market, or even the car market. Both buyers and sellers naturally interact in their own best interest, because of the beauty of capitalism. In the job market, sellers(employers) and buyers(potential employees) are both interacting in hope of getting something useful. The seller wants to find an employee for the most reasonable price, while the buyer wants to get a job that will offer them the greatest utility for the money. Buyers and sellers naturally interact, and the seller will not settle for less than is acceptable to that person, because if they need the money they will search until they find what they are looking for. The seller will not pay more than they can afford because that will cause them to use more than the proper share of their resources, will cut into their profit margin, and will defeat the whole reason they are in business. This happens when outside sources come in and delegate their power on the business world. When minimum wage laws are in place, we replace the integrity of the buyer/seller exchange with legislation that mandates what is the lowest price that an employer can pay an employee. We tell the employer that if they are to hire someone, they cannot haggle with the person to get a pay scale of mutual liking, but they have to pay at least this amount, profit be damned. This disallows the employer to use his or her resources as they wish, but tells them where a certain portion of their resources will go, and hinders the future of their spending on future employees. The minimum wage sets a "price floor" beyond which the wage can go no lower. This price floor sets the minimum wage at a higher price than the market equilibrium price, making for a surplus of labor. When the labor is at a surplus, we will have higher unemployment, and lower productivity than if we had the efficiency of market equilibrium. This in turn causes more government legislation to try and lower unemployment and leads to the slippery slope that the country has no began on. All in all, if the government would allow businesses and their potential employees to interact on the capitalist economy the way it was meant to be acted on, everyone would be for the better.
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