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Is your contention that there's no difference in raising wages in small countries with largely centralized populations vs. a country of 320M with massive region
by replicatorblog 11y ago
Is your contention that there's no difference in raising wages in small countries with largely centralized populations vs. a country of 320M with massive regional differences? Sweden and New York City are roughly the same size. California is quite a bit larger than Australia, so we will soon see how these experiments compare in real life.
- BurningFrog 11y agoThe size of the country does not matter for microeconomic effects.
- JonFish85 11y agoChanging a wage for a country, as the post said, is probably a bit more macro- than micro-
- BurningFrog 11y agoThe standard Microeconomics¹ analysis is clear: If an employee is paid $10/h and produces $12/h of value for the employer, the employer makes a profit of $2/h and will want to keep the employee. If they must pay $15/h this becomes a $3/h loss, and the employee will be fired. It's hard to see where the size of the country would enter into this. Of course, if a raised minimum wage causes higher unemployment etc, this will have macro economic effects, but that's secondary effects. ¹ A more descriptive name for this branch of Economics would be "Price Theory", but we're stuck with the name.
- replicatorblog 11y agoFactor in culture. People of Scandinavian descent do even better financially in the US than they do in their home countries. Even if true in a textbook sense, I'd bet the sense of social cohesion that comes from a small culture has an outsize impact on that country's economic output. But lets watch the experiment play out. Maybe the book stores in SF that are closing due to the new wage are just abberations or unfortunate side effects.