Listening to a podcast this morning that briefly talked about minimum wage laws, my mind drifted to a slightly different framing of the issue than I typically consider and wanted to jot down some quick thoughts for posterity.
Possible effect 5: Fred gives up on his Pizza business, finds a 12$ job (since he is actually quite capable) and they end up with, effectively, a 12$ minimum wage, 3 unemployed islanders, and no pizza.
Agreed & that's usually how I would frame my objection. Trying to convey in this post that even if it does not affect employment (as some economists desperately try to claim), and the policy acted as "intended" (i.e. Scenario 4 above) all you would be left with is a situation where some collection of people (lawmakers) get to decide that some folks should benefit (those keeping their jobs at higher wages) at the expense of some other folks (employers). Hardly something that anyone should see as moral or praiseworthy.
Possible effect 5: Fred gives up on his Pizza business, finds a 12$ job (since he is actually quite capable) and they end up with, effectively, a 12$ minimum wage, 3 unemployed islanders, and no pizza.
The real minimum wage is $0/hr, and the higher you raise the fake minimum wage, the more people will earn the real one.
Agreed & that's usually how I would frame my objection. Trying to convey in this post that even if it does not affect employment (as some economists desperately try to claim), and the policy acted as "intended" (i.e. Scenario 4 above) all you would be left with is a situation where some collection of people (lawmakers) get to decide that some folks should benefit (those keeping their jobs at higher wages) at the expense of some other folks (employers). Hardly something that anyone should see as moral or praiseworthy.
Commander- I’m a little slow today, please explain. Thanks in advance for your patience with a slow follower!!
The real minimum wage is $0 = you don't have a job.
The higher you raise the fake minimum wage (Let's say to $50/hr), the more people who will be laid off, as described in the article above.
Therefore, the more people who will earn the real minimum wage of $0 -- because you made it illegal for them to work for less than the fake wage.
As a small business owner that knows the effects of politicians meddling with capitalism, you are spot on.