Minimum wage

#1 12-03-2005, 06:39 PM

Good or bad?

Any references to morality and any clearly ideological viewpoints (ON EITHER SIDE) will be ignored. Factual evidence accepted only.

TomCollins · #2 12-03-2005, 06:44 PM

It's good if you like unemployment and inflation.

The Don · #3 12-03-2005, 06:44 PM

Bad: The supply of labor exceeds demand (in some circumstances when the minimum wage is above equilibrium) which leads to unemployment and an inefficient allocation of resources.

#4 12-03-2005, 06:48 PM

I am not sure what you mean by this. The supply of labour exceeds the demand? What does that have to do with minimum wage. That is the price of labour, not it's supply. Isn't it?

The Don · #5 12-03-2005, 06:54 PM

If the price of labor is above the market equilibrium (as is the case when the government determines wage prices), then more people will want to work than employers are willing to hire. Basic economics. This isn't the case all of the time (when equilibrium is above the minimum wage there is no effect) but sometimes it is... primarliy causing unemployment.

#6 12-03-2005, 07:19 PM

Can you back this up with any evidence?

TomCollins · #7 12-03-2005, 07:29 PM

Economics 101.

Edit - added a link.
web page

#8 12-03-2005, 07:40 PM

I want actual proof. Empirical evidence.

TomCollins · #9 12-03-2005, 07:45 PM

[ QUOTE ]
I want actual proof. Empirical evidence.

[/ QUOTE ]

Try looking at every piece of evidence in the theory of Supply and Demand. If you can disprove this, you can mention me in your Nobel Prize Ceremony.

The Don · #10 12-03-2005, 08:01 PM

It seems as though in America the minimum wage laws have primarily affected teen employment. Most people earning minimum wages are (were in 1997) not "breadwinners" (only 11.7% according to the article) but teens with limited human capital or multiple income families.

Source - Minimum Wage Laws and Teen Employment