Venezuela has just enacted a 3,500% minimum wage increase across the country, but they are not allowing businesses to increase the cost of goods and services to compensate for the wages they now have to pay.

Thus, 40% of businesses are shutting their doors. They say they just can't pay the new wages.

Some people are even saying that if they go against this in any way, they will be immediately arrested.

And thus we can see socialist command economies just don't work because often when they try to meddle in the economy, they end up making things worse.

They can't predict exactly what will happen.

But this brings me back to the United States. Recently, Alexandria Ocasio-Cortez, the famed Democratic Socialist in New York, was lamenting the closing of a coffee shop she used to work at.

But the owners of that coffee shop said they're closing their doors because they can't afford the higher wages that are being mandated by law, law that Cortez actually supports.

So my question today, does minimum wage law really work? Is it beneficial to people or does it hurt them?

Let's start by looking at Venezuela.

From the Miami Harold, Maduro's huge salary hike deals fatal blow to 40% of Venezuelan stores.

Nearly 40% of all Venezuelan stores have closed their doors. Some of them perhaps permanently.

After the government of President Nicholas Maduro increased the minimum salary by nearly 3,500% in one fell swoop.

Many of the companies, which had been barely surviving the gradual collapse of the economy, saw the salary increase and other changes announced last month as the fatal blow in a string of policies that have been gradually strangling their operations.

The problem is that Venezuelan companies are being forced to sell at prices far below cost. Just as employee salaries are increasing by 60 times.

The regime has banned stores from increasing their prices in order to cover the increase in salaries, arguing that it is not necessary.

If they do increase prices, store owners or managers can wind up in prison.

We have inspections, and they force us to sell at last month's prices, she said.

That takes money away from the business because of the hyperinflation. When you can't even sell at yesterday's prices because you lose money.

And anyone who protests against these measures runs the risk of going to jail without the right to appeal, without the right to do anything simply because the official whose turn it was to inspect the store just felt like arresting you. He did it and that's all.

About four out of every ten stores have not opened their door since Maduro announced the salary increase two weeks ago.

And some of the stores that did open are simply liquidating their merchandise and plan to close definitively when it's done.

Economist Orlando Ochoa said the stores cannot survive the salary increase, especially because the owners already had problems obtaining foreign currency to buy imports and buying national products in short supply to fill their shelves.

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