spook75

What exactly is a "fair"wage? Do you have any idea how the economy works? I would imagine not, because if you did, or if most people did they would entirely discard this notion of a "living wage".

Let me break it down nice and simple, not to make you seem like an idiot, which i am sure you are NOT, but to make sure there is little confusion. The market place depend on two things; supply and demand. Where the two meet is your equilibrium price. This applies to goods and services as well as wages.

When the government creates a minimum wage that is higher than the market will bear (artificially increases wages above equilibrium) it has the effect of reducing demand from the employers, as they are less willing to hire people at a higher wage and an increased supply of people willing to work at that higher wage. This creates a shortage of jobs (unemployment) as the firms will higher less people. But it gets better!

Not only do firms hire less people creating unemployment, but because wages acrossed the board have been increased you and more money is in circulation, which is a rightward shift of the money supply, which not only creates inflation (prices increase due to more money chasing the same amount of goods), but ALSO has the effect of increasing interest rates as prices are the determining factor of interest rates in the long run. But it gets better yet!

Higher interest rates will effect many things to include loans that you want, but will also stunt nationwide investment as interest rates are higher for everyone, but not only that but higher interest rates ALSO depreciate the dollar making it less appealing to foreign investors, reducing foreign influx and possibly causing an increase in the current account deficit,

You see, when you follow the chain of events in economics you find that government meadling is bad for everyone. This concludes todays lesson on why a "minimum wage" is a bad idea.