So, lets run with this.....if a wage increase happens, more demand occurs, more money is spent....oh my, looks like the business will survive after all.
Hung on your own petard.
Giving laborers a higher wage makes them spend more money
Giving laborers a higher wage makes them spend more money
Giving laborers a higher wage makes them spend more money
Giving laborers a higher wage makes them spend more money
Giving laborers a higher wage makes them spend more money
But your point was that suddenly, overnight, consumers have more money in their "pocket", in fact a "doubling". Does this happen because the fed told treasury to double the cash in every ones "pocket"? If so, you described monetary inflation.
Non-sequitur.Monetary inflation causes price inflation... This is why asset bubbles pop up.
But...Giving laborers a higher wage makes them spend more money...ergo...production will not fall....because of the more money spent.We already proved together with supply and demand that businesses can not afford to give higher wages with production falling.
Giving laborers a higher wage makes them spend more money....which is spent at businesses....which is greater demand.....which causes greater employment.How can laborers earn more money if unemployment levels increase
But...Giving laborers a higher wage makes them spend more money...ergo...production will not fall....because of the more money spent.
Giving laborers a higher wage makes them spend more money....which is spent at businesses....which is greater demand.....which causes greater employment.
Is that how MW works.....it is a temporary thing?If your only goal is to temporarily boost demand, just have the federal government send them more money in the mail.
Is that how MW works.....it is a temporary thing?
Well I'm just repeating the Libertarian meme that "Giving laborers a higher wage makes them spend more money", if it is false, take it up with the other poster above.Whatever increase in demand you think results from the statutory wage hike, yes that's clearly temporary, otherwise our problems would have been solved long ago when we increased the minimum wage before. Markets are a lot more dynamic reactive (especially today) than your linear analysis of the predicted domino effect of positive consequences suggests.
Well I'm just repeating the Libertarian meme that "Giving laborers a higher wage makes them spend more money", if it is false, take it up with the other poster above.
As far as MW not having much effect, I agree, when it remains lower than it was 40 years ago, it won't have much effect.
Again, if you disagree with this statement, take it up with the author...I don't want to deal with it.The premise itself isn't even necessarily valid.
Oh. I thought you wanted to go on about how it would solve our "problems" if we kept MW at or below 1977 levels.The left wing either doesn't understand the dynamics, or they do but are outright lying as to why they want to raise the minimum wage. ....
Again, if you disagree with this statement, take it up with the author...I don't want to deal with it.
Oh. I thought you wanted to go on about how it would solve our "problems" if we kept MW at or below 1977 levels.
I always love absolute arguments, I wasn't aware that MW in and of itself was going to "solve our problems", all those undefined problems.Having the federal government set a single minimum wage for the nation isn't going to solve our problems one way or another, regardless of whatever level it's set.
I always love absolute arguments, I wasn't aware that MW in and of itself was going to "solve our problems", all those undefined problems.
Thanks that stimulating debate.
Time and time again you negate economic theory with a non substantive argument. You just say you disagree without any theoretical or empirical a prior truths, in a sense you just know how to deny because you disagree with ideology and can't resort to any positive assessment because you create this methodological bubble of normative study.
Investment directly depends on wages, when real wage drops in response to nominal wage hikes it distorts the markets time preference on cash balances which hinders the inertemporal functions of the time market, because now demand for cash diminishes.
I said restaraunts can't afford to increase payment of their factors of production because certain industries are elastic. Is has nothin to do with profit, it's due to interest income which is then offset by the decreasing demand to hold and results in a misapplication of resources to a separate sector of the production process of capital. Is is a result of min wage because it increases the demand beyond the supply which then in turn makes the employer subject to more pick of labor, thus choose more risk free factors such as higher experienced workers, displacing rightful low skilled labor, as well as adjusting capital into the consumption sector when it should be part of the production process.
Low wages aren't subsidization, min wage is because they are effectively using coercion to subsidize low skilled labor above the equilibrium price level
We see it by asserting he fact that the bulk of job displacement in response to min wage laws are the teenage factors of labor. This then pushes the teenagers out of work, doesn't cause nominal unemployment but does cause labor factors to switch to different production industries.
Please explain how free market theorists are wrong with factual economic analysis because you're lack of understanding is becoming extremely tiresome
I did not say min wage will pay higher salaries I used the example of how increase the wage beyond equilibrium level will distort the labor market and reallocate capital to unproductive manners.
so if i have a position, full time, that a high school kid could do....and the wage only paid $ 9.00 hour....
and it paid that wage, because the job was easy, and no skills were needed.....
i should never even offer the job to anyone
is that your opinion?
Let's say I work in Pismo Beach CA and I make 15/hr as a manager, min wage increases to 15/hr I don't get a raise. Guess what I being paid equal to my employees... Why take the added stress for no additional nominal wage?
You should re-read Adam Smith again.
Yes he talks about equilibriums -- correct.
But you must have missed the part about overtaxing the poor or underpaying the poor.
Please read it again.
They "might" get gold, frankincense and myrrh from Santa Clause, their Faerie Godmother, and the Tooth Faerie as well.
But...Giving laborers a higher wage makes them spend more money...ergo...production will not fall....because of the more money spent.
Giving laborers a higher wage makes them spend more money....which is spent at businesses....which is greater demand.....which causes greater employment.
You don't present an argument, you present a claim, and yes empirical proof was presented.
Why would real wage drop in response to nominal wage hikes? Explain why that would be the case?
Here's why you're wrong. Increasing the minimum wage does not increase the amount of People looking for low wage jobs as opposed to higher wage jobs.
THe assumption Your making, which you HAVE to substantiate, is that With a lower minimum wage People who are looking for low wage jobs would be looking for higher paid jobs,
THere is NO reason to think that this is the case.
THere is NO reason to think that a doctor would not work at a practice making a lot of Money and would rather work for minimum wage washing something because the minimum wage is higher, not higher than his optiong of being a doctor, but higher than the minimum wage before.
That's the assumption you need to defend.
Saying you can'y pay someone below a certain Level isn't "coercion"
You're wrong because the assumption is that People would rather take low skilled jobs that pay less than skilled jobs that pay more, just because the low skilled jobs pay more than they used to ... What's the defense of that?
Because chances are Your wage will increase as well, also many People prefer managerial positions.
I'llmtake your argument and secrion it off in two responses
Real wages are a complete reflection of the purchasing power of the monetary unit. As we see prices rise that in turn reduces the real wage. This happens when the aggregates nominal wage increases because now we are stimulating consumption demand. So if aggregate cash balance goes from 10$ cash balance end of the month to 20$ cash balance at the end of the month in the long run that is only a nominal wage increase because prices will rise with increased spending habits. Since prices rise in a correspondence to nominal wage increase this means the purchasing power a unit of money has decreases.
Increasing the minimum wage makes a surplus people wanting to work. This is shown when we take a average supply/demand graph and then induce a price floor. If he price is 10/hr at equilibrium, which it is not at the moment, and then we increase price through government coercion to 15$/hr what this does is lower the quantity demanded for labor by the producer, and then it increases the quantity supplied on the supply schedule. This price floor then creates a surplus of labor and smaller amount demanded, doing so now puts the business owner in complete control over the wage contract because now workers now have limited businesses hey can switch to.
Also, since there is smaller QD of labor the worker now will readjust themselves into a job that is below their level of experience due to the shrinking quantity of work demanded which will result in pushing out less experienced workers from industry in the aggregate. This is shown with the empirical data I have shown you that says teenagers are becoming more and more unemployed as min wage increases
We will call managers factor m and average labor factor x
Wages for managers won't increase, this is because when the capitalists pay out to either factors of production they have a limited amount they can pay, the factors marginal value of production. The capitalist is forced to discount all of this, when a third party comes in and forces a certain factors X rent to increase, while not necessarily increasing the MVP of factor x, this then forces the capitalist to cut back on the factor M rents, to pay it. Because now the capitalist will be paying the other factor (factor x) more then the other factor (factor x) will give in return. When this happens it sets a barrier against the managerial factor M increase rent in two ways.
One, the capitalist can not pay the factor m increased monetary units since the capitalist is already overcharging the other factor x
Two, it limits the factors MVP because it diminishes the factors m "motivational drive" to be more productive due to the fact that other factors x which are not as productive are being rewarded the same monetary unit.
So basically it's the old "higher wages leads to higher cost of living through inflation." Here is why it is obviously fallacious:
1. You're assuming the supply wont Catch up to the demand, of course it will, higher spending meanins higher demand means larger market for more compedators to jump in and sell.
2. You're assuming that consumption goes up universaly, that's not true, People might buy more Food, but not that much more, the might use more heating, not that much more, what the extra Money gets spent on is on Things like furnature, Movie theatre visits, restaurants and so on, other non essencial consumer goods and services, so it wouldn't really raise prices that much on the essencials.
3. You're assuming all the extra Money is spent and noe of it is saved.
4. You're assuming this imagined inflation would outweigh the wage hike.
5. You're assuming that None of that extra Money is invested.
All of these assumptions are baseless, completely ... so you're assuming a bunch of stuff which you cannot defend in order to come to Your conclusion.
As for the surplus of People wanting to work, this is Complete nonsense, People without a job want to work no matter what, it's not like there are a ton of People out there who can get a job but refuse to take one because making no Money, or being on welfare, is better than taking a low wage job.
A supply/demand graph is not the end all be all, especially when it comes to Labour.
And no it doesn't lower the quantity demanded for labor by the producer, because the producer is not buying the labor as a commodity, but rather as a factor of Production, the producer buys what he NEEDS in order to produce, no more no less, not only that the increase in demand for consumer Products means an increase in demand for labor.
As for the idea that workers would rather take less skilled jobs because the less skilled jobs pay more than before, it's completely rediculous.
The reason higher skilled workers are taking lower wage jobs is not because the minimum wage has made those low age jobs more attractive, it's becuase they CANNOT GET higher skilled jobs, the jobs arn't out there.
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