Aielyn said:
You seem to think strong economy = higher prices. It doesn't have to work that way. In a lot of cases, the limiting factor isn't supply, but demand. If more people have more disposable income, it allows them to buy more things, which increases demand for those things, which in many cases simply means more profit due to more sales for the company that makes those things. And if demand increases, companies can either increase supply or increase price. Increasing price will of course price out the very people that were able to afford it anyway, so increasing supply enables them to meet the demand and make the same profit. And to increase supply, they need to hire more people. As for the idea that the market is a better way to determine this stuff - don't make me laugh. You clearly don't comprehend economics even to a mild degree if you think that the employment market is one that works well in that way. There is always more supply than demand in the employment market - you'll never have zero unemployment. As a result, companies are at the advantage, able to lower pay further and further. Since the difference between paying people just enough to survive and paying people less than enough to survive is zero as far as demand is concerned, and people being paid less need more hours to survive, the result is actually LESS employment. The market is in no way a good method of controlling this sort of thing. Ever heard of the Prisoner's Dilemma? It applies in economics constantly - the optimal value isn't found, the nash equilibrium is found. And in most cases, unless you apply restrictions, the nash equilibrium is very different from the optimum. In the case of Prisoner's Dilemma, despite the fact that both prisoners cooperating is the optimal result, each prisoner gets a better result by defecting, and the result is one that is less optimal for both. The government plays the role of the regulator. They provide ways to circumvent these sorts of problems. The minimum wage is one such control - in this case, a minimum wage set around the real optimum will provide the best net result for everybody, for multiple reasons. Note that Australia has a minimum wage 50% higher than the one being discussed here. Unemployment in America is 7.6%, Australia's is 5.4%. Note that Australia also has much more generous unemployment benefits (which require you to continue looking for a job) that don't expire after a certain amount of time, so it's not because fewer people stay in the job market. |
Wow 5.4%!!!! That's an amazing number isn't it!?? Well it is until you look at the actual participation rate which sits at a solid 65%. In real numbers that is around 7.7 million out of 22+ million Adult Aussies not working!!! Thats a real unemployment rate of oh about 35%! While that is slightly better than the US (by like 1.2%) it still isn't something you should really be bragging about. So your politicians meddling in the organic economy works about as well as ours does. Which is to say it doesn't work... AT ALL!
The minimum wage is a feel good measure that, forces companies to hire fewer workers, raise the prices of goods and services and does nothing to fix living standards etc. In fact it has been the reason we here in America see much higher unemployment and more poverty for most minorities, who historically have been willing to work for less. If governments would butt the hell out of the organic economy and let it work like it is supposed to things would be much better. All this price fixing, minimum wages, carving out of territories etc. is why people cannot find work.
