Monday, July 18, 2011
New way to look at (literally) appraising the minimum wage
New way to look at (literally) appraising the minimum wage: add one line within a line to ye ole 101 supply/demand chart always invoked against raising the minimum: show the labor component of the supply price. If the price of labor doubles -- but is only 10% of the total cost of output -- and demand consequently dropped only 10%: that sounds great for labor. Justice: simply explain that a market is only efficient (and fair) when all parties to a bargain are able to extract the maximum the other parties are really willing to pay.