> I think it would be nice if wages rose faster than inflation. It is nice, and there is a history of this happening. > There's nothing that special about la

> I think it would be nice if wages rose faster than inflation. It is nice, and there is a history of this happening. > There's nothing that special about labor markets that prices shouldn't be set by supply and demand. 0. There is a significant imbalance of market power between the buyers and sellers of labour. 1. At the low end the price for labour has important welfare implications. 2. It is hard to create transparency about high end jobs. > If the government e.g. the Fed isn't smart enough to constantly set the price, how are they smart enough to set a rule that would be permanently right? The Fed is already setting a price, the price of money (Interest Rates), in a way deliberately designed to manage a balance between unemployment and inflation. They are smart enough to do a respectable job of this, and have managed inflation well. > I kind of think the minimum wage should be more like a labor protection, ie set it 10-20% below the bottom 10% of the wage distribution. Basically for those cases where a local employer is a price-setter, as opposed to a price-taker, or a worker really doesn't have much choice of employer for some reason, or is a really bad negotiator, the employer can't totally abuse it. Just like they can't make you use a chainsaw without protective eyewear. I agree, this goal of minimum wage policy is the welfare of low paid workers. > If it's OK to fix minimum prices for labor, why not for anything else? I am in favour of a minimum price for alcoholic beverages. Perhaps by a tax based on $2 per standard drink.