From: Reason (reason@exratio.com)
Date: Sat Apr 05 2003 - 16:07:43 MST
You're missing the very complex part of the model that shows how much
revenue an entrepreneur can generate per employee. Personnel are the largest
cost in almost all businesses. You are also missing the taxation cost of
enforcing a minimum wage.
That and workers never becoming entrepreneurs is silly. It's a dynamic
equilibrium at best, and the number of entrepreneurs is all over the map
with legislation, cost of money, industry you have in mind, etc, etc...
Reason
http://www.exratio.com/
> -----Original Message-----
> From: owner-extropians@extropy.org
> [mailto:owner-extropians@extropy.org]On Behalf Of Lee Corbin
> Sent: Wednesday, April 02, 2003 1:53 AM
> To: extropians@extropy.org
> Subject: Help with a Minimum Wage Model
>
>
> 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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