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Yakk · 10-30-2005, 07:59 AM

Politico and Alan, those are not true statements.

There is not a fixed pool of money that can be spent on the minimium wage jobs. Companies can rebudget, reduce profits, increase or decrease service to areas, hire out from other companies gaining more productive workers. Any economic model which claims that there is a fixed pool of money to hire minimium wage workers, without substantial and massive documentary, theoretical, and statistical support is a dishonest one.

Alan, there are scenarios in which an increase in minimum wage would not reduce consumption of minimium wage employment.

A minimium wage being set acts like the government setting a monopoly price. Depending on the utility curve of employing minimium wage workers, it is possible that employment might not go down. This isn't all that likely -- but it is possible.

It is also possible that it would reduce employment, but significantly less than the % increase in the minimium wage. Which would mean fewer people employed, but more money going to the poorest parts of the nation.

Which "frees" up the now unemployed for government assisted education, ideally, in order to increase their job prospects.

Setting a higher minimium wage is an attempt to say "any job less than this in value is a charity case, not a livelyhood".

It is true that an arbitrailly high min wage would be disasterous. The same is true of an arbitrarially low min wage.

10-30-2005, 07:59 AM	#28 (permalink)
Yakk Wehret Den Anfängen! Location: Ontario, Canada	Politico and Alan, those are not true statements. There is not a fixed pool of money that can be spent on the minimium wage jobs. Companies can rebudget, reduce profits, increase or decrease service to areas, hire out from other companies gaining more productive workers. Any economic model which claims that there is a fixed pool of money to hire minimium wage workers, without substantial and massive documentary, theoretical, and statistical support is a dishonest one. Alan, there are scenarios in which an increase in minimum wage would not reduce consumption of minimium wage employment. A minimium wage being set acts like the government setting a monopoly price. Depending on the utility curve of employing minimium wage workers, it is possible that employment might not go down. This isn't all that likely -- but it is possible. It is also possible that it would reduce employment, but significantly less than the % increase in the minimium wage. Which would mean fewer people employed, but more money going to the poorest parts of the nation. Which "frees" up the now unemployed for government assisted education, ideally, in order to increase their job prospects. Setting a higher minimium wage is an attempt to say "any job less than this in value is a charity case, not a livelyhood". It is true that an arbitrailly high min wage would be disasterous. The same is true of an arbitrarially low min wage. __________________ Last edited by JHVH : 10-29-4004 BC at 09:00 PM. Reason: Time for a rest.