Mises’s text from ‘Human Action’ shows the negative effects of a raise in the minimum wage, a dear subject to all labour unions. This raise produces unemployment, while the unions call for violence and violates property rights. The raise of the minimum wage is an artificial rise (above the equilibrium mark) in the price for labour and is part of the larger socialist-interventionist state measure to control the prices on the market. When the good becomes too expensive, it doesn’t sell; so happens on the labour market, hence the unemployment. Unskilled workers, non-union members, and those whose work is not worth a minimum wage take the toll on this artificial rise in the price for labour. A young man creating value of 400 RON would not get hired for the minimum 500 RON wage. Mises finds common grounds between trade unions and Ku Klux Klan, in respect to their call for violence. They reach their goal in coercing employers to raise the worker’s minimum wage. (Costel Stavarache presents)

To read: Minimum Wage Rates, excerpt from Mises, ‘Human Action’