Bennett Hypothesis: Financial Aid Increases Tuition

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85% of minimum wage workers are between the ages of 16-24 who live with someone who is above the poverty level; such as a relative.  Of the remaining 15% of minimum wage earners that are head of households earners, they are stuck in the welfare trap.  Welfare is very difficult to get off of once you are on due to the lack of incentives to get off.  I mean why work 40 hours a week at slightly higher wages when you can work 10 hours a week and receive subsidies at equal or greater value than those slightly higher wages.  So those in the 15% tier will mostly find it more advantageous to remain there and usually do.  

For every minimum wage increase of 10%, 1-2% of those workers become unemployed.  The cost of goods for those workers also increases at a more significant rate than the benefit of the wage increase.  Minimum wage increases always hurt minimum wage workers because it prices low-skilled workers out of the market and they are replaced with those who have skills that justify the wage.  Of those who are unemployed, they then have to choose to work in unpaid internships to gain the skills necessary to justify $15 an hour.  Yep, those $15 wage increases have now forced low skilled workers to work for free or choose welfare.  

When you are low skilled and have a very little work history, the only thing that is attractive to employers is the fact that you are willing to work for low wages - such as those interns I just described.  Once you become more productive your wage reflects that, but you have to gain experience before that occurs.  When you take away the option that someone is willing to work for low wages and you flood the market with imported low skilled workers, you are hurting the 16-24-year-old age group by delaying the necessary skills they need to move up to the next wage tier.  

Minimum wage increases, subsidies, grants, and any other government program do not have a win-win effect on the economy.  By taking away something from someone else that they normally wouldn't agree to in the free market, you are creating a win-lose effect which has overall negative consequences on the economy.  The secondary effect is that money could have been spent on win-win transactions benefiting two parties, not just one.

As the government tries to interfere with the free market, the free market will replace those workers with technology, because it is only natural to bypass regulation when it interferes with the natural balance of the free market.  

Free markets are the fairest system of all, and consumers judge a businesses value by awarding it with profits or penalizing it with losses.  Crappy businesses go out of business while good ones continue to provide value.  Unfortunately, governments aren't held by those standards because they operate on budgets - not profits.  When government programs eventually begin to fail, they are replaced with larger budgets funded through tax increases and printing money (win-lose effect).