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21 sats \ 1 reply \ @Caleb 14 Jan \ on: Youth unemployment: Welcome to Fiatlandia econ
The problem is the government imposes a price floor on certain services. You want to sell your labor for what it’s worth, the employer wants to buy it at that price, but the government says no. You have to sell your labor for way more than it’s worth, so what happens is fewer people are hired, services are reduced, customer prices go up.
Price floors lead to surpluses and price ceilings lead to shortages. Everyone agrees on this, but when you refer to minimum wage, which is simply a price floor on labor, everyone’s emotional monkey brain kicks into overdrive to argue how it’s somehow an exception.