Sunday, March 1, 2009

Minimum wage laws are counterproductive on YouTube



My second try. Hopefully, I've improved. Any criticism would be appreciated.

8 comments:

Jesse said...

I'm not convinced by your arguments. I recognize the basic principles of supply and demand that you're referring to, but your argument lacks any empirical evidence or even solid logic to demonstrate how minimum wage laws hurt the economy. Please keep in mind, simple laws of supply and demand are constantly tainted by the myriad of laws that also affect the economy, such as industry specific income tax breaks, import tariffs, overreaching copyright, trademark, and patent laws, etc.

In my opinion, any damage done to the economy by minimum wages, is outweighed by protecting low wage earner's from employers trying to lower their cost of business. This is especially true in an economic downturn, such as the one most of the world is experiencing now.

There are millions of examples of employers taking advantage of a large source of people that need jobs by only offering them a very low wage in third world countries. In most third world countries the gap between the upper class, middle class and lower class is huge, as the power to make and influence laws is concentrated in the hands of the upper class.

When the supply of labor is high, then market needs a lower cap to prevent employers from offering such a low wage that it widens the gap between the upper class and lower class.

The problem with letting supply and demand run amok, is that it maintains a consistency in wealth distribution. The wealthy get richer, the poor get poorer. I think supply and demand needs a little bit of regulation to be it's best.

Sphairon said...

"simple laws of supply and demand are constantly tainted by the myriad of laws that also affect the economy, such as industry specific income tax breaks, import tariffs, overreaching copyright, trademark, and patent laws, etc."

True. That's why I support the abolition of these arbitrary laws.


"This is especially true in an economic downturn, such as the one most of the world is experiencing now."

Keep in mind, economic downturns usually have something to do with discovered flaws in the structure of production and thus, necessarily affect wages as well. We saw a huge decline in gas and real estate prices, didn't we? So we might also expect wages to adjust.

Artifically keeping wages high hurts those who depend on them because it eventually becomes impossible to keep them employed. Roosevelt tried this, among other things, and thereby prolonged (not solved!) the 1929 panic.


"When the supply of labor is high, then market needs a lower cap to prevent employers from offering such a low wage that it widens the gap between the upper class and lower class."

On the other hand, this could lead to an indefinite exclusion of the unskilled workforce from the division of labor, thus legally shackling them in a miserable state of affairs.


"The wealthy get richer, the poor get poorer."

How, then, do you explain the vast shifts in the distribution of wealth in the wake of the Indutrial Revolution in England _in favor of_ the poor? Check out Robert LeFevres lectures on this one:

http://mises.org/mp3/lefevre/127.mp3

http://mises.org/mp3/lefevre/128.mp3

http://mises.org/mp3/lefevre/129.mp3

http://mises.org/mp3/lefevre/130.mp3

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Sildenafil said...

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Meaghan said...

It cannot have effect in actual fact, that is what I think.