Eric Raymond has an excellent rant he titles “Marginal Devolution”. The main point he makes is that as our liberal government makes it more and more expensive to hire someone. This is a key libertarian (and to a lesser extent, conservative) plank element, and well worth understanding in detail.
The classic example is the minimum wage laws. It's demonstrable that every time the minimum wage is increased, the number of people employed at minimum wage goes down. Why? Because through the minimum wage law, the government just made it more expensive to hire someone. No matter what the level they set the minimum wage, the following will be true: there will be jobs that aren't worth the minimum wage to the business, and there will be people willing (but unable, thanks to the law) to take those jobs for less money.
This is one of the many reasons why liberalism always fails in the long run. And very typically for liberal programs, the well-intentioned minimum wage regulation (“How can we expect people to work for so little money?”) backfires and hurts the very people it was intended to help...
I'm pretty sure I posted something similar on this subject before. Lets look at a company like McDonalds as an example. They have employees working various jobs at minimum wage and various levels of managers each making some amount more money. Lets say you start at McDonalds at $7.00/hr and you work really hard and after a year or so you get a promotion to assistant manager and a raise to $8.00/hr. Some of your co-workers didn't work so hard, they still make $7.00/hr. So McDonalds values your efforts $1.00/hr more than those guys that just show up. Along comes congress who raises the minimum wage by $.50. So these coworkers who didn't bust their behinds just got a $.50 raise... did you? almost certainly not. So that differentiator between the value of your work and the value of theirs just narrowed. Worse, this could easily cause the cost of certain goods and services to increase. Not just your employer making up for this expense increase, but other goods and services as those employers adjust. So, once everything is back to an equilibrium, adjusting for that $.50/hr change, those $7.00/hr employees are back where they were in terms of purchasing power and you my friend, are actually worse off. Not only did the difference in value between your labor and theirs get cut in half to $.50, but as costs go up the equivalent of $1.00/hr, I content you could actually be the equivalent of $.50/hr worse off than when you got that raise originally! For someone like me that makes a significantly more than minimum wage, the effect is less pronounced, but is still there.
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