4 ms·
>Is the minimum wage too high or something? I would ask in response: why does anyone still believe that the supply of something, rather than the demand of it,
by harrumph 10y ago
>Is the minimum wage too high or something?
I would ask in response: why does anyone still believe that the supply of something, rather than the demand of it, overdetermines the price of a thing?
This seems at best an incomplete worldview. At worst, it's the epitome of thoroughly discredited supply-side market theology.
There is unemployment because there is no demand for labor in these areas largely because the main employer in the area decided to pad profits by getting labor supplied from brutally poor people living in unregulated nations.
- pc2g4d 10y agoBut if the employer could pay less for labor in the U.S. then perhaps they would have kept the jobs here. That's what I meant by asking if the minimum wage is "too high". This isn't related to supply-side economics. Just the basic idea that price floors (like minimum wages) can exclude the price point at which supply and demand would be in equilibrium, specifically by suppressing demand by keeping the price artificially high.
- harrumph 10y ago>But if the employer could pay less for labor in the U.S. then perhaps they would have kept the jobs here. The notion of a sustained equilibrium between supply and demand is a real-world fiction to begin with, but even if it was not, we can never forget that fulfilling employers' true demand for labor includes putting children to work in coal mines and chaining humans for sale. True demand for labor is unfulfillable, so I think we have to recognize that using pricing mechanisms alone to frame what are fundamentally commercial and political questions is a mistake for all concerned.