From: Damien Sullivan (phoenix@ugcs.caltech.edu)
Date: Sat Apr 05 2003 - 20:45:00 MST
> Lee Corbin writes:
>
> > 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 know some economists have done stuff like this already. I have a vague
memory of the mechanism being something like
o raising minimum wage gives more money to workers, possibly unemploying some
o but workers spend the money they get, vs. the rich people the money was taken
from who saved most of it
o so demand increases, calling for more workers to be employed to satisfy
demand.
Another angle might be to throw out the assumption of a perfect market. The
whole thing of equilibrium price and minimum wage being a price floor above
that comes out of models of perfectly competitive markets, at least in simple
analyses. But if employers are an oligopoly -- market power and all that --
raising the legal wage might just shift some of the profits to the workers,
without causing unemployment.
I don't claim that's a solid idea, just an angle I can think of. Hopefully
I'll stay out of arguments about this, since there's real literature I haven't
read on the subject.
-xx- Damien X-)
This archive was generated by hypermail 2.1.5 : Sat Apr 05 2003 - 20:57:41 MST