Claim: Minimum wage laws help poor people.
Expanded: It is exploitation to pay workers less than a certain amount of hourly wage. Raising their wages by law is fair and helps these workers. Analysis: A firm calculates how much extra profit it makes with each individual worker. If a potential worker can add to the firm's overall profit, then he or she will be considered for hiring. No firm is looking for workers on which it continuously makes a loss.
A minimum wage that is higher than a person's hourly productivity takes away the reason to hire them.
The reason why wages go up is because employers compete with each other for workers. If employer A offers a wage that isn't close to someone's productivity then employer B still stands to profit by offering a higher wage.
A minimum wage that is higher than the market priced wage takes away the reason for firms (existing or new) to invest in that industry or area and create jobs.
If wages are freely floating then the most jobs can be created, then the people who need them the most can underprice others and secure a job, and by being able to work with low productivity someone can raise his productivity through experience and learning on the job and thereby be more sought after and have his wages bid up.
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Am I missing something? Is this conclusive?
Stefan Molyneaux had some podcasts on minimum wage that really opened my mind - some great stuff on how there will be increased investment in automation technology because hiring manual labor is more expensive... and then a couple years later, even the people working under the table for their old sub-minimum-wage prices are priced out cause the automation tech. is cheaper cause the new investment. Anyway, it's worth listening to his archive of that.
Also, it's worth going over the basics: wage increases come from increased capital, and minimum wage blocks the production which is needed for capital to accumulate. Thus, in the long run, it's a self-defeating proposal.
Stefan Molyneaux had some podcasts on minimum wage that really opened my mind - some great stuff on how there will be increased investment in automation technology because hiring manual labor is more expensive... and then a couple years later, even the people working under the table for their old sub-minimum-wage prices are priced out cause the automation tech.
When I ran in the provincial election and said that minumum wage causes unemployment at a candidates meeting the Green Party candidate actually responded by using that as an argument in favour of minimum wage. Presumably the idea was that it was good because it incents technological development.
bump
So by your logic does paying workers more than a certain amount of hourly wage equate to exploitation of the employer?
What is your definition of "fair"?
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Minimum wage laws benefit skilled union laborers over unskilled workers.
Minimum wage laws cause unemployment as demonstrated each and every time they're instituted.
Minimum wage laws harm the very people they are intended to help (or at least the people the politicians claim they will help; poor people don't usually make huge campaign contributions, while labor unions do).
There must be a million articles on Mises.org that adequately address this subject.
No, that isn't my logic; that's the logic I'm trying to debunk.