politicartoons | (no subject)

I think I got it originally, it just... doesn't really make sense. (at least with what I know about who actually gets paid minimum wage and what just a few dollars more would give them in terms of, well, not working themselves to death.. but sure, let's just think about the poor little huge-companies-who-hire-a-majority-of-minimum-wage-workers and the poor little CEOs-at-the-top-who-rake-in-all-that-profit. poor them!)

It's basic economics. If you have $X available for labor, and you increase labor costs unnecessarily, it means you can pay less people for labor.

It's basic economics. If you pay your employees more, they have more money to spend, thus stimulating the overall economy and your company.

That's an economic multiplier theory that, in execution, never seems to come to pass. Probably because it assumes that the money rolls right back into those offering the minimum wage and that there's somehow a demand gap that's not really there for that wage level.

It's basic economics. If a person making minimum wage gets a raise, they'll spend that on things they need or want but couldn't afford before, which is good for the businesses where they spend it, promoting job, wage, and economic growth.

Can you feed your family on your minimum wage?

Probably not, but that's not really what minimum wage jobs exist to do, nor is "need to feed my family" a reason to ignore the market value of a specific job.

that's not really what minimum wage jobs exist to do

And yet.

There are a Lot of folks trying to feed their families on minimum wage, or close to it, for lack of better paying jobs.

Indeed. It's like trying to dig a hole in the backyard with a spoon. Yeah, you can use the spoon. It might get the job done. It's also not what it's for.

(no subject)

red-pill.livejournal.com - 2013-10-11 07:00 (UTC) - Expand

(no subject)

oslo.livejournal.com - 2013-10-11 09:52 (UTC) - Expand

Totally basic economics. If you have $X available for labor, try not to keep most of that for yourself.

> It's basic economics. If you have $X available for labor,

There's a flaw in the argument, right there. The presumption of a static fund available for labor.

That's pretty much how it works, though.

Then wouldn't we expect a strong correlation in time between minimum wage increases and unemployment, with the latter lagging a bit behind the former?

Labor markets are not "basic economics" in the sense you're saying. A good example might be this "basic economics": In a monoposony market, binding price floors increase quantity rather than lower quantity

If you pay people more, they spend more, creating more opportunity for businesses. It's basic economics.

Except this assumes that money flows back into the place offering the higher wage. It's why that multiplier never works in reality.

You're saying that no wage increase ever goes back into the economy, which means basic inflation broke the economy irrevocably a century ago and we're now back to the hunter/gatherer lifestyle.

(no subject)

badlydrawnjeff.livejournal.com - 2013-10-11 11:34 (UTC) - Expand

Based on this mindset, aren't you asking for a ladder with only one rung all the way at the bottom?

Since I'm asking for the removal of the wage floor, no.

If this is true, why aren't the people making minimum wage making more as time goes on?

(no subject)

badlydrawnjeff.livejournal.com - 2013-10-11 03:27 (UTC) - Expand

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mylaptopisevil.livejournal.com - 2013-10-11 04:16 (UTC) - Expand

lol.

You're right, it is basic economics: if job makers hoard all the money and only pay the minimum amount that they are legally obligated to pay, then job makers get to hoard all the money and most of the rest of the people go on welfare and work themselves to death.

Except that by introducing a minimum wage the economy as a whole grows, because welfare costs and negative externalities decline and you have more optimal results due to a greater equality of negotiating wage levels. That's why increases in minimum wages tend actually can increase employment levels.

No, this isn't high-school level economics. But you should pick it up in second semester of uni.

Yes, you're again going with the theory behind it that, in execution, results in negative impacts on unemployment.

You are wrong in theory and fact, but lack the moral fortitude to admit it.

http://www.epi.org/publication/bp178/