Auggie wrote on Apr 22
nd, 2017 at 3:27pm:
crocodile wrote on Apr 22
nd, 2017 at 2:42pm:
Auggie wrote on Apr 22
nd, 2017 at 12:41pm:
For those who support the minimum wage....
Give me a job or shut the f' up.
It's not quite that simple Augwhatever. Minimum wages aren't much different to minimum prices for anything. It only adds to unemployment if the minimum price of labour is above the market clearing rate.
On top of this we have a federal reserve that manipulates the size of the money supply in response to inflationary pressure thereby indirectly setting interest rates. Under such a regime, full employment is simply not possible whether minimum wages exist or not.
A pool of unemployed is the de-facto price paid for inflation targeting.
I agree with your assessment of the Federal Reserve. I assume you've taken inspiration from Milton Friedman on this issue?
What I meant by the post was that all these people who talk about a high minimum wage, if they're not willing to employ me because I'm too expensive, then you've just proven my point about the minimum wage - that is discriminates against low-skilled employees.
I'm willing to work for $5 p/h for a second part time job, and if an employer is willing to take me on, what's wrong with that, crocodile?
Much of the work regarding the employment - inflation tradeoff was first published by Ibn Khaldun way back in the 14th century. Further analysis was done by Phillips in the '50s. Friedman was essentially a monetarist that is credited with explaining why the work of Phillips didn't hold during the stagflation years of the late '70s and early '80s. His work on NAIRU is standard fare these days.
The issue of minimum wages is far more complex than you suggest. It sounds great at first blush until all of the effects are considered. The lack of a minimum wage in some cases only leads to an ephemeral bump in employment numbers as the firms that are labour intensive generally get swept aside in time by outfits with higher productivity. This is one of the reasons why the slave hoarding south in the USA continually fell behind in economic terms from their northern cousins despite almost free labour. Technology and industrialisation at work. Productivity in a nutshell.
It is true that placing a floor under the cost labour that is above the rate at which the market clears is detrimental to employment but on the other hand it also discourages innovation which is the lifeblood of productivity and living standards.
There is much to consider and even such things as education policy become vital. Growing technology does displace the lowest skilled so the next generation has a necessity to come to terms with it. Unfortunately, it is a dog's breakfast today.
A minimum wage is helpful but where it should be set is something that I can't answer for you.