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61 sats \ 9 replies \ @Undisciplined 4 Jan \ parent \ on: Help me understand minimum wage logic better econ
No disagreement here, but some of the answer to the OP's question has to do with the way these effects manifest.
Eventually, things settle out like you'd expect from theory. However, what people hear when the conventional case is made is something like "Everyone will get fired". Then, when relatively few people actually get fired, it looks like the economists just didn't know what they were talking about.
Truth is minimum wages stimulate the economy as minimum wage workers spend most of if not all of their wages within the domestic economy.
Employers bleat about having to pay more for workers yet those same employers enjoy considerably increased demand via the expenditure of the increased minimum wage in the economy.
The other major factor which Libertarians seem oblivious to is that minimum wage workers who are frequently living in or close to poverty often lack much negotiating power with wealthy employers. Employers naturally take advantage of this paying the least possible to workers. Minimum wages address this inherent imbalance in negotiating position between wealthy employers and low wage workers.
Libertarians cannot point to any advanced and wealthy economy where there is no minimum wage because Libertarian dogma does not work in the real world.
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Libertarians cannot point to any advanced and wealthy economy where there is no minimum wage
Here you go: https://www.investopedia.com/articles/investing/080515/5-developed-countries-without-minimum-wages.asp
I guess you have to abandon that talking point now.
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king daddy socialist utopia Sweden has entered the chat lol
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deleted by author
Did you read the link?
All 5 of these exceptions to the rule ( Sweden, Denmark, Iceland, Norway and Switzerland) have STRONG UNIONS high and progressive taxes and strong welfare provisions so the usual disadvantage in negotiating power is not present removing the logical need for a minimum wage.
These are not exemplar Libertarian nations these are the COMPLETE opposite and only because of their strong welfare and strong unions is the need for a minimum wage actually removed!
Your link thus strengthens my argument overall especially regarding the general tendency for low wage workers to not have a strong negotiating position with employers.
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interesting points, i think some countries dont have a min wage per se, but like unions that do the price negotiating, no?
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Singapore has no minimum wage or very low
Maybe Hong Kong also
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Have you seen the living conditions in the immigrant worker camps in Singapore and their workplace conditions?
Would you want to be one of those workers?
They are tantamount to slave labour.
Is this the Libertarian dream?
Note - Singapore does technically have minimum wages but set at slave labour levels...designed to enable use of temporary foreign workers at very low cost poverty level incomes.
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Yes as the link provided by @Undisciplined states The Nordic nations and Switzerland who have strong welfare and unions do not have minimum wages as they could argue they don't need one as low wage workers have adequate negotiating power via unions and protections from unemployment via welfare and are thus not forced into working for poverty level wages.
Interesting and hilariously ironic that Undisciplined cannot give any other example of a developed economy where the minimum wage is not in place...except where the very antithesis of Libertarian ideology is practiced!
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