Supply and demand IS what the market will bear. Or rather, what the market will bear always flows directly from supply and demand, including for labor. While you are correct, you have just described a strength of large-scale corporate workforces: they provide strong evidence that employers are not keeping down wages, but do in fact respond to the market, even in labor.
Becaue, though you didn’t notice, the idea that employers are holding out on employees is quite opposed to the point that they use the market to determine wages. They pay what the employee is worth, or not surprisingly what the employee convinces the managers what they are worth.
Because in simple terms, “the economy” is the mechanism in a society by which raw materials are converted by labor into the products and services people in that society need and want. When it is working well, quality of life improves for everyone. When it is working badly, you have inefficient pockets of people willing to work and people needing labor but the two can’t connect to each other for some reason or another.
Rent control is bad.
Free Trade is, with some adjustments, good.
Any blanket statement that minimum wage is bad is nothing more than politicking by a poor professor. Minimum wage is hardly a panacaea to eliminate poverty, but it is not the blanket evil you are pretending that it is.
This argument is often advanced, although it does not actually occur in the real world. The number of people whose wages actually have a bearing on staple items and the wages they are actually paid are just not in the minimum wage range. The closest one might come to such an event was the organization of migrant farm workers and the reality was that after they finally got better living conditions, produce prices did not follow the minimum wage curve. The inflation of those prices matched the rest of the inflationary economy of the 1970s. (As with most industries, there were so many people harvesting produce who were not affected by those rules, that there was a typical supply/demand limit on prices.)
One can argue that having millions of desperately poor people rioting in the streets is “bad for the economy”. Think of the MW as insurance that the more well off take out to ensure some level of civil order.
Personally, I would rather see no MW and a minimum safety net, but they amount to essentially the same thing. It really just boils down to how you want to do the accounting.
I rather strenuously doubt the connection. The big problems with a minimum wage are:
(A) I see little evidence that it raises the actual market clearing price of few of the jobs available for adults
(B) That is hurts employment that the young, who might benefit from experience.
(C) It raises costs and prices without actually imrpoving the bottom line for most people.
But that’s not true. The Min-wage has a lot of inefficiency costs and secondary effects.
Why do they open sweatshops in China then? It’s true that the call center operator in India didn’t replace a minumum wage call center operator in the United States. But the hundreds of thousands of women operating sewing machines did. Or rather, the sweatshop workers in the United States never made minumum wage because they weren’t paid an hourly wage, they were paid by the piece.
Studies belie your conclusions. it does not cut employment. Nor does it cut kids from jobs. It just does not do what you claim.
Define inefficiencies. How can a slightly higher minimum wage cause any problems at all?
Since corporations are at all time high profit levels, how can it hurt anything?
It will increase spending and increase demand. Those are good things.
Why would it increase prices if profits are huge?
Yes, the minumum wage, if we added up all the costs correctly, probably costs society more than just handing out checks to poor people.
However, it’s a lot more politically palatable to disguise welfare payments in this way, even if it costs us more in the long run. It ain’t like we can abolish the minumum wage tomorrow and replace it with cash handouts of equal value. These sorts of inefficiencies and attempts to force third parties to pay for social goods enjoyed by everyone are part of living in a society of fallible human beings.
http://www.americanprogressaction.org/issues/2011/06/higher_minimum_wage.html
This study shows no or almost no impact on hiring. It further suggests that raising it will take some off food stamps and other government programs. It also says demand goes up.
There is some vague feeling that some people have, that there must be less jobs if rates go up, but studies prove otherwise.
Because it doesn’t improve the quality of life for everyone. There are no free lunches in economics. Everything has a cost associated with it. If you increase labor costs, basic supply and demand theory tells us that either companies won’t be able to hire as much or (more likely IMHO) prices will rise to cover those costs and meet the increased demand made possible by higher salaries. With those increased costs you just wiped out any real benefit.
That is not what studies show. They show that it does not result in less jobs. Corporation profits are at an all time high. ALL TIME HIGH.
If there is more demand, companies have to hire to maintain service quality and to meet the demands. That is when they hire. The minimum wage increases demand since poor people spend everything on survival.
It improves the quality of life for millions of families and millions of kids. It will actually increase jobs.
Sophistical thinking is failing you.
Does anyone want to take a crack at the question I asked earlier: If the minumum wage is currently too low, how high should it be set and why? A little bit higher to keep pace with inflation? Or a lot higher? Or what?
It is not that easy. Minimum wage varies by state. Lots of them have a much higher minimum wage than some others. They have to meet the Federal Minimum though. State Minimum Wage Laws | U.S. Department of Labor It appears 4 southern states have managed to avoid minimum wage.
Idealogical thinking is failing you. There have been some studies that seem to indicate that small increases in minimum wage might increase unemployment, but in general those opinions are still in the minority amoung respected economists.
Do the stats say that a person making a quarter over minimum wage, is not working for minimum wage. Honest stats should include everyone within 10 percent or so .
So apparently minimum wage is bad for the economy. Well, according to people here anyway. If so, considering that many countries do have minimum wages, how would those countries be better off without a minimum wage?
Personally, I’m in the “it may be bad for the economy, but not everything should bow blindly to the will of the economy camp”. Of course, the country I live in doesn’t have a minimum wage, but instead a de facto minimum wage is agreed by the various industries via unions and collective bargaining, which someone how I feel is going to be even more “wrong” in the eyes of those that don’t like minimum wages …
Exactly. As I cited earlier the last increase resulted in raises for 10% or so of people. I don’t know what all this business about inflation is. The extra money resulted in a real increase in standard of living. I experienced it.
The graph begs the question, what inflated? The things that the poor actually buy, like food, shelter, etc. didn’t change much until the priced of fuel went sky high.
Edit: further that graph goes shooting up about the time fuel prices got in the >$4 range.