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    Government Minimums Hurt The Poor

    By imposing a minimum amount of insurance coverage, Obamacare limits the freedom of Americans to make their own choices. The government "minimum essential benefits" is denying health insurance to many who would like to have it. That's always the case with government minimums: they hurt those on the bottom the most.   

    Mandatory Health Insurance

    At least 5 million losing coverageThere are many problems with Obamacare, but one of the biggest is the wide array of restrictions it places on insurance policies. It wasn't enough to say that everyone had to have health insurance, and to allow people of modest means to find modest insurance to protect them from financial calamity in the event of a major health event. Instead, the law forces coverage for expensive health conditions regardless of whether they make any sense; like maternity care for men and alcoholism treatment for people who don't drink.

    As a result, the law has made health insurance unaffordable. 

    Now for a couple of hypothetical examples to show why government minimums make things difficult for those at the bottom rung of the ladder.

    Minimum Housing 

    Suppose Congress put into law that rental apartments had to offer two bedrooms, two bathrooms, and had to be wheelchair-accessible. Each would have to be furnished with quartz amalgam countertops, a two-door refrigerator (with ice and water in the door), modern range, microwave oven, and central air. 

    The cost of a typical apartment would be put out of reach for many people, so of course, a subsidy would then be needed. Knowing their tenants would receive subsidies, landlords would feel free to increase prices.

    Suppose likewise that every house had to have four bedrooms, 2,000 square feet of living space, an attached garage with electric car charging station, solar power panels, and associated "green space" including at least two trees shading the part of the roof not occupied by solar panels. All of these mandates would drastically increase costs to the builder, which are then passed on to the potential buyer. 

    The resulting barrier to entry into the housing market would create an ownership gap and generate a real class divide between those who had been able to afford a minimum essential house and those who could not. Increased subsidies, such as homebuyers' tax credits, would only further increase home prices and ultimately increase the ownership gap.

    Minimum Anything

    The same principles apply to any government mandated minimum: the minimum denies people the ability to get started in the marketplace, a barrier to entry until they can meet the minimum. 

    Another real-world example is in the labor market.

    Minimum Wage

    All of the above applies to the minimum wage. The minimum wage denies people the ability to get started in the marketplace for jobs. It's a barrier to entry until they can meet the minimum level of productivity. It forces employers to hire fewer people and demand more out of them -- and those who aren't yet able to deliver the minimum don't get to work. If the minimum wage were lower, or if it didn't exist, more people would have access to the market and compete in the labor force with their all-important first job.

    The minimum wage hits hardest the less educated, the physically or mentally disabled, and those in or near retirement. 

    Increasing the minimum wage is never a good idea, but it's even worse during times of high unemployment. With too many people chasing too few jobs -- and many giving up the chase entirely -- now is certainly not the time to make it harder to pay people, and thus harder to hire them.

    The result of the minimum wage is increased government dependence.

    Just as with minimum health insurance, setting a government minimum wage doesn't help the people most in need of help. Instead, both place participation in the economy just outside of their reach, forcing them to continue in the cycle of dependence.