Quote:
Originally Posted by Lune
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It's not that simple. I know your Econ 101 professor sounded totally convincing and you feel confident parroting his perceived expertise everywhere you go, but sometimes (often) economists are wrong, or at the very least inaccurate or only marginally applicable to real circumstances.
This is some Alan Greenspan tier-"Financial regulation is bad!" followed by "I was wrong, sorry about that"-level horseshit.
Pull your head out of tea party ass and learn to think on your own
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You're right, it's not that simple. Instead of flat out causing unemployment you can see other effects: reduced hours, benefits reduction, increased prices of anything requiring cheap labor, and the effects can be blurred and muddled a bit. Prices tend to arrive at an equilibrium and wages are no different. After a while wages will rise or fall to the equilibrium level which is the marginal product of labor, and one of my professors did a pretty simple example of why this happens.
Why i don't care for constant minimum wage increases is that you're trying to correct a symptom instead of a problem. The problem is that there are workers who are not skilled enough to make a certain amount of money. They can become more skilled in two ways, either education or work experience, and often times raising the minimum wage prices out unskilled workers so the 2nd choice is not an option. Also, when you prevent a firm from being able to discriminate based on price, they can start to discriminate based on other things.
Another thing to consider with a minimum wage though is welfare. If a person would make as much or more from welfare than they would working 40 hours a week at XX dollars, then they have no incentive to work. Looking at the hourly wage equivalents for welfare in some states (Hawai $17.50!!), it actually makes sense to me that raising the minimum wage would decrease unemployment.