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MP: Therefore, minimum wage workers could be made worse off with an increase in the minimum wage from reduced hours and income, even if it doesn't show up as an increase in the unemployment rate.

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PeakTrader said...

A higher wage and more leisure time could be a net benefit.

And if prices rise, higher wage earners will help pay for a wage floor.

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It's not a "misallocation of resources" when a firm hires the best worker, e.g. "young dentists forgo starting their profession to remain as bartenders -- making hundreds of dollars per night."

Good bartenders are hard to find.

If there were abundant jobs and starting a business became easier, then you can hire less qualified workers.

Some people prefer to work as a bartender for $100,000 a year than a dentist for $150,000 a year.

And some people prefer a good bartender than a bad dentist.

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If government didn't raise the cost of living through more regulations, taxes, fees, fines, fares, tolls, etc., then government wouldn't have to raise the minimum wage too.

Big government makes people work harder for less, ceteris paribus.

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For Liberty, presumably, when one person has money and another needs money, desperately, then there can be exploitation, particularly with an oversupply of labor.

An example of exploitation is a poor Mexican immigrant willing to work for $5 an hour to wash windows of skyscrapers without a safety cord.

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Methinks, perhaps, that poor Mexican doesn't believe he's being exploited and believes the odds of getting killed or injured is only 1% (when it's really 10%).

Afterall, some labor is expendable, right?

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It's uncertain if the Chinese masses were exploited.

Moving from the farm to the factory likely raised their living standards (i.e. they became less poor), although they had to work hard for it, and many were forced to move, because of pollution, deforestation, erosion, etc.

Of course, U.S. multinationals and the communist elites made huge profits, while U.S. consumers benefited from lower prices.

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Methinks, people learn from their mistakes, and even the mistakes of others, e.g. the realization that a safety cord is important when washing windows of skyscrapers, after you watched a few people fall 80 stories.

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I suspect, most people who earn the minimum wage are the young and the poorly educated.

Prime targets for exploitation.

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Randian, I think, we should get all the people who aren't disabled or retarded employed first before thinking about how to get them employed too.

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Anon says: "If minimum wage is so good, why don't increase it to 100USD/h?."

Because $100 an hour is more than a subsistence wage, i.e. you don't need to rely on government or your family to help pay for your most basic bills or expenses.

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Methinks, here's what VF/H.H. Cutler’s CEO said when asked if the 28-cent-an-hour wages they paid in Haiti were subsistence wages:

“Well, the workers are alive aren’t they? So they must be subsistence wages.”

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Hydra, can you predict which way a drunk will tip over?

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It's irrational to buy a lottery ticket only when the chance of winning is zero.

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"We fear losses more than we enjoy wins."

And you feel worse when you're wrong than feel better when you're right.

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Zachriel, are you saying people will buy lottery tickets if the chance of winning is zero?

Which way a drunk will tip over is a random event, because of irrational behavior (the chance of falling in the best way may be equal to the worst way).

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Methinks, a dollar is immaterial to many people.

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PeakTrader said...

W.C. Varones says: "...how about giving the new money to the people rather than the Wall Street crooks?"

Financial innovation on Wall Street is important in raising U.S. living standards, like technical innovation in Silicon Valley.

Wall Street help build the most efficient economy the world ever saw, created and captured trillions of dollars of real wealth in the global economy, distributed that wealth to America's masses, and diversified the risk globally.

Subprime lending and "too-big-to-fail" were government policies.