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I usually really, really hate when people trot out the "go back to econ 101" argument, but in this case it applies. The reasons why a minimum wage might be inef
by savanaly 11y ago
I usually really, really hate when people trot out the "go back to econ 101" argument, but in this case it applies. The reasons why a minimum wage might be inefficient (to what degree is very much debatable and dependent on the cirumstances) are explained thoroughly in any introductory microeconomics educational resource.
- maxerickson 11y agoSometimes econ 101 is macro. I feel like a lot of the people who think economics is all terrible nonsense start off with macroeconomics (and maybe never get to microeconomics because of it).
- thescriptkiddie 11y agoThe ECON 101 argument regarding minimum wage and deadweight loss gets a lot less convincing when get to ECON 110 and start learning that the real world is a lot more complicated than two roughly-perpendicular curves. In real life, labor markets have very inelastic supply, which means that the deadweight loss is small and comes almost entirely from consumer (in this case, employer) side. In most cases this is a net gain for workers. Of course, all of this goes out the window if the minimum wage is non-binding (as it is in most of the US), in which case there is actually zero deadweight loss. Basic income is far superior to minimum wage for meany reasons, but "minimum wage doesn't work" isn't one of them.