"The idea of minimum wage is to prevent employers from taking advantage of the welfare state to feed workers, so they can be continually exploited. But in essence what this does is make the employer a formal part of the welfare state. Minimum wage is like an additional welfare tax on employers of low-skilled labor, remitted directly to the worker. It's a solution, slightly better than the dole, but it has a lot of problems of its own, as you outline."