Economic theory suggests an excessive minimum wage may raise unemployment as it fixes a price above demand for labour, although a reasonable minimum wage enhances growth because when poorer workers have more to spend it stimulates effective aggregate demand for goods and services. (Photo credit: Wikipedia) Read about what is in bold print below.
MINIMUM WAGE RHETORIC
In the State of the Union address, the President called for the minimum wage to be raised to $9 an hour. Politicians who propose minimum wage laws are trying to gain the moral high ground on the “morally inferior” people who oppose these laws, they are not trying to help low wage low skill workers. These politicians think that making a law mandating employers pay their employees higher wages, will fool the public into thinking they are morally superior to their opponents. They prey on the emotion of the public and hope the public will not analyse what happens when wages are set higher than they would be under unhampered market conditions. Unfortunately the consequences of the legislation turn out to be different from the utopian promises that the public, and the media, so desperately want to believe can be delivered.
MINIMUM WAGE REALITY
Labor is supplied on the market like any other good, but the public has been brainwashed by Marxist propaganda to believe that an individuals labor is special, and should not be subject to the morally neutral forces of supply and demand. (more…)
AUSTRIAN ECONOMICS ADDICT 