Obama plans to raise the min. wage to $9 an hour.

[septimus]

@John_Mace

The move proposed by Obama is unlikely to have a measurable negative effect on the economy or unemployment. It’s just too small an amount. The one good thing about the MW vs welfare (and the MW is just a form of welfare) is that it has pretty much ZERO overhead cost. No government agency has to be created to cut millions of checks.

This seems to me to be a very good summary. The MW hike may have a big effect on the economy of MW earners, or course!

For a 10% MW hike to result in 10% or more MW layoffs, we’d need elasticity |E[sub]d[/sub]| ≥ 1. Instead, I think Minimum-Wage elasticity is generally estimated at |E[sub]d[/sub]| ≤ 0.4, no? Stated differently, those in the thread pretending that demand for minimum wage workers is fully “elastic” are uninterested in any actual economic facts, and just blowing smoke based on what they’d like to be true to fit their dogmas.

Pretending that the unassisted free market finds a “perfect” price for everything is ignorant.

@BrainGlutton

RationalWiki sez:

Thank you for your post, BrainGlutton. Linking to actual (gasp!) real information is a welcome change from ignorant posts based on what one might like to be true. (A complaint that applies also to those on the left, though much much less so than those on the right.) The posts of BobLibDem also seemed intelligent and right-minded.

Note that the present minimum wage is lower in real dollars than that of 1951. I started a related thread recently

@septimus

There is an interesting graph on a PBS News page. It shows that U.S. corporate income fluctuated near a 71/29 ratio (labor vs capital) for many decades, but beginning about 2001 slid in capital’s favor and is now about 64/36.

Of course the value of capital has increased over time, while the value of unskilled labor decreases, but that doesn’t explain the recency of the big change.

… that received zero responses.