Help with a Minimum Wage Model

From: Lee Corbin (lcorbin@tsoft.com)
Date: Wed Apr 02 2003 - 02:53:26 MST

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    I would like some help with a model in which minimum wage
    laws would have a positive effect on the wealth of, if not
    society, then the lowest wage earners.

    I posit N entrepreneurs in country X where there exist M >> N
    (that is, M much greater than N) low-level workers. In order
    to become wealthy, an entrepreneur must enlist the aid of
    workers in his enterprise. Only entrepreneurs and workers
    exist.

    Now it seems to me that if the numbers N and M are fixed
    (i.e., no worker may become an entrepreneur) and M is larger
    than the number of workers H that the entrepreneurs can
    possibly use, then a minimum wage causes H people to
    receive more money than the H workers would receive
    otherwise, supposing also that at least M-H workers receive
    nothing in every case.

    It's only with these assumptions that I can see how minimum
    wage laws help the poor.

    Any criticism or ideas?

    Lee



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