Free marketeers have rightly written many refutations of the minimum wage.
However, it’s difficult to beat something with nothing, and so this article will outline major ways in which wages actually rise: through capital accumulation and the honing of skills that others value.
Before looking at how wages can increase, what determines them in the first place? Wages tend to equal the productivity of the worker. If Jones the chef can bring in thirty dollars an hour for Smith, the restaurant owner, Smith will have to pay Jones almost thirty dollars an hour, or else another restaurant can snag Jones away along with the revenue he offers.1