Ok, so I'm going to toss out this idea, even though I'm assuming it will be dismissed here. But, please give it some thought before you rule it out.

So, here's the rationale. A minimum wage is a price floor. Labor supply and demand do not meet. Therefore, you end up with a shortage of labor supplied. Specifically, for low-skilled workers. This is not only theory supported by I'd estimate 90% of economists, it's also supported empirically.

Currently, the rate of teenage unemployment rate is at a record high.... 25%

http://www.nytimes.com/2009/09/05/busin ... en.html?hp

As mentioned before, the minimum wage causes concern for low-skilled workers. Typically, these are teenagers or part-time workers. For instance, Walmart pays above the minimum wage. So, these are low-end jobs, that only people who need money would take.


The point here is to say, maybe a temporary hold on the minimum wage law is not only smart economically, but also something that could be agreed upon given the generalized consesus in economic theory and empirical evidence behind it. sSince some have a problem with it due to moral implications, perhaps an exception could be given, due to the difficulty teenagers are having finding employment.... maybe a timeline with a horizon clause.

What are your thoughts?

i do hate being unemployed.

especially two months ago.

Actually 99% of the economists agree that minimum wage curbs the economy more than it helps.

fair enough.

Care to support that statement, Bass?

i think it'd be interesting to see a study on the effects of minimum wage raises showing employment levels and inflation numbers (or the value of a dollar in subsequent years compared to its value in a base year). would probably be more interesting if it was developed specifically for one state that had a higher than the federal level min. wage at some points, so the employment levels and inflation rates could be compared.

another good component would probably be estimated illegal alien employment or something to that extent. i'm sure there are others i'm missing out on too. you'd probably have to look at taxation and government spending levels as well.

Probably fairly beneficial to the personal economy of low skilled worker though.

of the one who is making 7 an hour, yes, but maybe not to the one who is jobless but would likely be hired if it came at a lower cost, or to an employer (and the aforementioned unemployed worker) who could spend say 10/hour for the two of them, as opposed to 14/hour.

So the argument is that rather than say "yay I can cut my wage bill" the employer will say "bonus now I can get 2 for the price of one".

might. i'm not saying it would always happen. it would probably sometimes happen.

It's the same argument as the lower taxes being a boon for employment. The idea is that as costs for business increase (decrease), the business is less (more) likely to hire, retain or allow increased hours for low level employment.


Regardless of whether one believes this or not, no one has yet to say whether they would support this or not, and why.

i don't know that it's 99%, but it's an overwhelming consensus (click here for a sampling of the literature). advocate for any price and wage control (except the price of interest, it seems) in a room of ten economists, and nine will give you a dirty look.

the only thing i would quibble with would be the temporary nature of the abolishment. get rid of the thing altogether.

why? viewtopic.php?f=7&t=4625

I only used the words "temporary" because I believed some who are uncomfortable would be able to say ok to it. I don't think a full-fledged abolishment is do-able politically.

I'm sure I said this in the main minimum wage thread, but I say abolish it and cover any poverty shortcomings with the earned income tax credit.

I think this has much less to do with the min wage and a lot more to do with unemployment levels all around. More ADULTS are having to take up part time min wage jobs, therefore leaving less for the kids. If you were running a business, it's certianly easier to hire a 30 year old than a 16 year old. You're going to assume the 30 year old is more responsible, needs less training, and doesn't have to be scheduled in order to conform with local labor laws.

First, let me ask you...

So, you are saying that the minimum wage law does not create a shortage in the low-skilled job market?

Second, of course the recession is causing some adults to take low-end jobs. There's no doubt about that and I don't think anyone would disagree with that. But, I don't see how that has anything to do with the point of the thread. Here we are saying that given today's economic environment, an abolishment of the minimum wage would increase employment for the low-skilled, holding everything else equal. Are you saying you agree or do not agree?

I think as long as immigration laws and enforcement are the joke that they are that minimum wage legislation is necessary. Illegal workers are a huge interference to the market setting of wages.

What? Why?