Economics Dictionary of ArgumentsHome
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| Minimum wage: The minimum wage in economics is the lowest hourly, daily, or monthly wage that employers are legally required to pay workers. It aims to protect employees from exploitation, reduce poverty, and ensure a basic standard of living. However, it can also impact employment levels and labor market dynamics, depending on its level relative to market wages. See also Wages, Labor, Production factors, Production, Costs, Trade unions._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Murray N. Rothbard on Minimum Wage - Dictionary of Arguments
Rothbard III 710 Minimum Wage/Rothbard: How can unions achieve restrictionist wage rates on the free market? The answer can be found by considering the displaced workers. The key problem is: Why do the workers let themselves be displaced by the union's WW minimum? Since they were willing to work for less before, Why do they now meekly agree to being fired and looking for a poorer-paying job? >Unemployment/Rothbard. VsMinimum wage: Why do some remain content to continue in a quasi-permanent pocket of unemployment in an industry, waiting to be hired at the excessively high rate? The only answer, in the absence of coercion, is that they have adopted on a commandingly high place on their value scales the goal of not undercutting union wage rates. Unions, naturally, are most anxious to persuade workers, both union and nonunion, as well as the general public, to believe strongly in the sinfulness of undercutting union wage rates. This is shown most clearly in those situations where union members refuse to continue working for a firm at a wage rate below a certain minimum (or on other terms of employment). This situation is known as a strike. >Strike action/Rothbard, >Wages/Rothbard, >Unions/Rothbard, cf. >Praxeology/Rothbard. Rothbard III 896 Minimum wage/price maxima/Rothbard: General, overall price maxima dislocate the entire economy and deny consumers the enjoyment of substitutes. Inflation: General price maxima are usually imposed for the announced purpose of "preventing inflation" - invariably while the government is inflating the money supply by a large amount. Overall price maxima are equivalent to imposing a minimum on the PPM (purchasing power of the monetary unit). >Inflation. Rothbard III 896 Wages/labour: The principles of maximum and minimum price control apply to any prices, whatever they may be: of consumers' goods, capital goods, land or labor services, or, (…) the "price" of money in terms of other goods. Minimum wage: They apply, for example, to minimum wage laws. When a minimum wage law is effective, i.e., where it imposes a wage above the market value of a grade of labor (above the laborer's discounted marginal value product), the supply oflabor services exceeds the demand, and the "unsold surplus" of labor services means involuntary mass unemployment. Selective, as opposed to general, minimum wage rates, create unemployment in particular industries and tend to perpetuate these pockets by attracting labor to the higher rates. Labor is eventually forced to enter less remunerative, less value-productive lines. This analysis applies whether the minimum wage is imposed by the state or by a labor union._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Rothbard II Murray N. Rothbard Classical Economics. An Austrian Perspective on the History of Economic Thought. Cheltenham, UK: Edward Elgar Publishing. Cheltenham 1995 Rothbard III Murray N. Rothbard Man, Economy and State with Power and Market. Study Edition Auburn, Alabama 1962, 1970, 2009 Rothbard IV Murray N. Rothbard The Essential von Mises Auburn, Alabama 1988 Rothbard V Murray N. Rothbard Power and Market: Government and the Economy Kansas City 1977 |
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