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MW is not a minimum price of sold goods. Plus Jonny is working by himself for himself in your scenario correct. Jonny can pay himself as much as he likes depending on how many apples he sells.
Minimum wage is a minimum price of sold services. In econ 101, sold goods and sold services amount to the same thing. Jonny's act of picking apples and going out on the street to sell them could be termed a service. Or the apples he sells could be termed 'sold goods.' Six of one, half dozen of the other.
Jonny is ultimately working for his customers, not himself, as with any business. If the minimum apple price goes to $3, Jonny can only pay himself as much as the rich widow down the street who feels sorry for him wishes to buy from him. Unless Jonny decides to go all black market and illegally once again sell his apples for $1.
Yes they are detrimental. Most economists will tell you so, based on simple supply/demand analysis.
Here is an example I've posted before:
Suppose 9 yr old Jonny has an apple tree in his yard where he can pick 5 apples per day, and sell them to passers-by for $1 each. So, he's making about $25 or so per week--not bad for 9 yrs. old.
The town mayor comes along and says that's not enough. We're going to impose a minimum apple price of $3. But nobody wants a $3 dollar apple, except maybe the widow down the street who feels sorry for Jonny and buys 1 or 2 apples per week. So now Jonny's income is down to $3 or so dollars per week. That is detrimental, no?
Travis T, your simple "apple prices" narrative is less than analogous to prices of labor.
Although both lesser desirable apple or workers might be obtained for any given asking price, due to employers' common wage differential practices, the wage rates of the most inferior workers, do affect the rates of lesser inferior and acceptable workers. (That's the economic and social justification of USA governments' minimum wage rates. Otherwise labor markets' determined theoretical minimum rates will too often "rush to the bottom".
The prices of the most undesirable or unacceptable apples will not affect the prices of acceptable apples.
To the extent of its purchasing power, the federal minimum wage rate reduces USA's incidences and extents of poverty among our working-poor and their dependents.
Respectfully, Supposn
Transcribed excerpt from the thread “Study: Higher Minimum does not increase the unemployment”, within the Politics and Other Controversies” forum.
////////
Reduced purchasing power, (i.e. the “real value”) of the minimum wage enables commercial performance of tasks that previously did not justify the costs of minimum rate wages; paradoxically, it doesn’t reduce the rate of unemployment.
Minimum’s lesser purchasing power provides employment for those who previously couldn’t obtain employment among jobs that justified paying at least the “real” current value of the minimum rate. There are always some that cannot perform in a manner that would justify the minimum wage rate.
When we permit reduction of the minimum wage rate’s purchasing power:
(1) More jobs than otherwise may be created at pay scales of lesser purchasing powers; also, due to employers’ wage differential practices, purchasing powers of other wage rates are also to some extents reduced).
(2) Lesser desirable or able workers are enabled to join the pool of employees and applicants.
(3) Lower rate workers and applicant pool sizes increase, but they exceed the numbers of additional lower rate jobs created.
(4) Unemployment rates for lower rate workers are not reduced.
(5) Additional products and services that previously did not justify the cost of the minimum wage rate, do not justify wages losses of purchasing powers effects upon the nation’s GDP.
Travis T, your simple "apple prices" narrative is less than analogous to prices of labor....
Respectfully, Supposn
How so? In both cases we are talking about a simple fiat minimum price control imposed by gov't. In one case it's the price of an apple. In fact if you consider Jonny's income as the price of his labor (picking and selling apples), it's exactly analogous to the minimum wage, at least as normally implemented in the US.
How so? In both cases we are talking about a simple fiat minimum price control imposed by gov't. In one case it's the price of an apple. In fact if you consider Jonny's income as the price of his labor (picking and selling apples), it's exactly analogous to the minimum wage, at least as normally implemented in the US.
Travis T:
Quote:
Originally Posted by Supposn
Travis T, your simple "apple prices" narrative is less than analogous to prices of labor.
Although both lesser desirable apple or workers might be obtained for any given asking price, due to employers' common wage differential practices, the wage rates of the most inferior workers, do affect the rates of lesser inferior and acceptable workers. (That's the economic and social justification of USA governments' minimum wage rates. Otherwise labor markets' determined theoretical minimum rates will too often "rush to the bottom".
The prices of the most undesirable or unacceptable apples will not affect the prices of acceptable apples.
To the extent of its purchasing power, the federal minimum wage rate reduces USA's incidences and extents of poverty among our working-poor and their dependents.
Respectfully, Supposn
Transcribed excerpt from the thread “Study: Higher Minimum does not increase the unemployment”, within the Politics and Other Controversies” forum. …
Minimum wage rate does not increase the rate of unemployment.
Minimum wage rate does not increase the unemployment rate of unskilled workers.
Sure it does if the minimum wage is high enough to impact the market. How many would be employed to do an unskilled job if minimum wage was $100/hr? A kiosk would be taking your order instead of a person.
Sure it does if the minimum wage is high enough to impact the market. How many would be employed to do an unskilled job if minimum wage was $100/hr? A kiosk would be taking your order instead of a person.
DDeemo, you do realize how small the dollar’s purchasing power would be, if the minimum wage rate was $100 per hour? I’m a proponent of gradually increasing the federal minimum wage rate until it reaches 125% of its February-1968 value; then annually monitoring and when necessary readjusting that rate so it’s never permitted to remain less than that targeted value.
I am not an advocate of pegging the U.S. dollar to the value of the federal minimum rate. I suppose that you do understand the comparative difference between the two afore mentioned concepts?
There are more than a few proposed methods to gauge the dollar’s purchasing power. I’d be satisfied by some of them, I suppose I’m unaware of many others, and I suppose some of those others would not please me.
Sure it does if the minimum wage is high enough to impact the market. How many would be employed to do an unskilled job if minimum wage was $100/hr? A kiosk would be taking your order instead of a person.
DDeemo, transcripted excerpt from the thread, "24 states will raise the minimum wage in 2020":
Quote:
Originally Posted by Supposn
Nmnita, … The poorest national economies are characterized by their wage rates’ poorest purchasing powers and their lagging behind the world’s progressive adoption of automation. Automation has always been to USA’s net benefit. But even if automation should not be to our benefit, low minimum wage purchasing power is certainly economically net detrimental to our nation. …
DDeemo, you do realize how small the dollar’s purchasing power would be, if the minimum wage rate was $100 per hour? I’m a proponent of gradually increasing the federal minimum wage rate until it reaches 125% of its February-1968 value; then annually monitoring and when necessary readjusting that rate so it’s never permitted to remain less than that targeted value.
I am not an advocate of pegging the U.S. dollar to the value of the federal minimum rate. I suppose that you do understand the comparative difference between the two afore mentioned concepts?
There are more than a few proposed methods to gauge the dollar’s purchasing power. I’d be satisfied by some of them, I suppose I’m unaware of many others, and I suppose some of those others would not please me.
Respectfully, Supposn
You missed the point - you asserted that
Quote:
Originally Posted by Supposn
Minimum wage rate does not increase the rate of unemployment.
Minimum wage rate does not increase the unemployment rate of unskilled workers.
I used an absurd $ Minimum wage to say that was not correct.
Quote:
Originally Posted by Supposn
DDeemo, transcripted excerpt from the thread, "24 states will raise the minimum wage in 2020": Respectfully, Supposn
Again, missed the point - this was not about automation specifically, it was about finding alternatives that WILL increase unemployment of unskilled workers if raise minimum wage significantly.
Minimum wages impact unemployment and especially unskilled workers IF they are at a level that they impact the market equilibrium rate. The trade off is higher wages for some of those employed but more unemployment of unskilled labor but that higher unemployment can be offset by benefits such as unemployment, welfare and SNAP.
You missed the point - you asserted that
I used an absurd $ Minimum wage to say that was not correct. … Minimum wages impact unemployment and especially unskilled workers IF they are at a level that they impact the market equilibrium rate. The trade off is higher wages for some of those employed but more unemployment of unskilled labor but that higher unemployment can be offset by benefits such as unemployment, welfare and SNAP.
DDeemo, I did state minimum wage rate does not increase the rate of unemployment and does not increase the unemployment rate of unskilled workers.
I too sometimes introduce hyperbolic statements to illustrate my points. this accompanying excerpt may or may not be an exaggeration and thus, I do believe elimination of governments’ minimum wage rates would effectively be significantly net detrimental to USA’s economic and social wellbeing.
Respectfully, Supposn
Transcribed excerpt from “Study: Higher Minimum Wage Does Not Increase Unemployment” thread within the “Politics and Other Controversies” forum:
Reduced purchasing power, (i.e. the “real value”) of the minimum wage enables commercial performance of tasks that previously did not justify the costs of minimum rate wages; paradoxically, it doesn’t reduce the rate of unemployment.
Minimum’s lesser purchasing power provides employment for those who previously couldn’t obtain employment among jobs that justified paying at least the “real” current value of the minimum rate. There are always some that cannot perform in a manner that would justify the minimum wage rate.
When we permit reduction of the minimum wage rate’s purchasing power:
(1) More jobs than otherwise may be created at pay scales of lesser purchasing powers; also, due to employers’ wage differential practices, purchasing powers of other wage rates are also to some extents reduced).
(2) Lesser desirable or able workers are enabled to join the pool of employees and applicants.
(3) Lower rate workers and applicant pool sizes increase, but they exceed the numbers of additional lower rate jobs created.
(4) Unemployment rates for lower rate workers are not reduced.
(5) Additional products and services that previously did not justify the cost of the minimum wage rate, do not justify wages losses of purchasing powers effects upon the nation’s GDP.
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