Labor Markets and Minimum Wage: Crash Course Economics #28

Adriene: Welcome to Crash Course
Economics, I’m Adriene Hill, Jacob: and I’m Jacob Clifford, and today we’re going to talk about labor markets, a pretty important topic. Adriene: Unless you’re independently wealthy,
or fine with living in your parents basement, you probably need to get a job. But how do you even
get a job? And what kind of job should you get? In a lot of ways, it comes down to
supplying a skill that someone else demands. [Theme Music] This is Cristiano Ronaldo. He makes about
$20 million a year playing soccer. Or football, depending on where you live. Pretty much everybody
would agree no one NEEDS that kind of money, but does he deserve it? How do his employers, the
Real Madrid Football Club, justify this huge salary? Admittedly, the market for professional athletes is complex, but on some level, it’s supply and demand. The supply of people that have the skills to
be world class soccer players is low. And the demand for world class soccer
players is incredibly high. Ronaldo might be willing to play for only
10 million dollars a year; it’s a lot of money. He might even play for 5 million. And
if he really truly loved the beautiful game, he might do it for free. So why is he getting
20 million dollars? This goes back to that really high demand.
Having a superstar on your team generates millions in ticket and merchandise sales.
It might help you win some of the many cups up for grabs in international football. So
Real Madrid thought Ronaldo and his double scissor move, were worth 20 million dollars,
and Ronaldo agreed, so they have a contract. These same ideas explain how wages are determined in nearly every labor market. Let’s go the Thought Bubble. Jacob: Usually when Stan goes to the mall
he’s the buyer. He demands sunglasses and giant pretzels and the businesses supply them. But if he wants a job at the mall’s pretzel
shop, the roles are reversed. Since he supplies labor, he is now the seller and the pretzel
shop owner becomes the buyer. A buyer of labor. Now, that’s when wage negotiation ensues. Stan could insist on a wage of $25 an hour
for his pretzel skills, but the owner would point out that they could easily hire other
people for much less. The owner could offer Stan a wage of only $1 per hour, but Stan would point out that he could easily get paid more at the Froyo shop. In the end, they agree on a wage that makes
each of them better off. The owner gets some help around the store and Stan earns money
so he can buy even cooler sunglasses. Economists call this voluntary exchange. The supply of labor depends on the number
of people that are qualified to do the job. Stan would love to get paid more, but since
warming up pretzels doesn’t require extensive skills, the supply of capable workers is high
and consequently the wage is relatively low. But that doesn’t mean that Stan is going to work for peanuts. The wage offered has to cover his opportunity cost — — the value of his lost free time and the money he could be making doing something else. The demand for labor depends on the demand
for the products a business sells. Economists call this derived demand. If pretzel
demand is booming, then the store owners are going to want more pretzel makers. If other
stores also need more employees, demand for workers will increase and drive up wages. Thanks Thought Bubble. Supply and demand explains
why wages are different for different professions. Engineers are in high demand because they
produce the products that many consumers want and their supply is limited because the training
for these jobs is pretty difficult. Social workers and historians, aren’t paid
as much, even though their work is important because demand is relatively low and supply
is relatively high. It’s not rocket science. Adriene: Supply and demand explain a lot,
but there are several reasons why wages in a labor market don’t end up at a competitive
equilibrium. Sometimes workers get paid less not because they have different skill levels,
but because of their race, ethnic origin, sex, age, or other characteristics. This is
called wage discrimination. Wages might also be unfairly low when a labor
market is a monopsony — when there is only one company hiring and workers are relatively
immobile. When you’re the only employer, workers have to take what you offer, or they’re
out of luck. Take the NCAA, the organization that
regulates college athletics in the US. Many economists point out that high profile college athletes are generating millions of dollars for their schools, but they’re forced to accept a very low
“wage” of a scholarship with free tuition. Now sure, baseball and hockey players can
skip straight to the pros, but the NFL prohibits drafting football players until three years
after high school. And NBA teams can’t draft basketball players until they’re 19. There are some situations where wages might
actually be higher than market equilibrium. For example, some employers might voluntarily
offer higher than normal wages to increase worker productivity and retention. Economists
call this efficiency wages. Henry Ford doubled the wages of assembly line
workers in 1914 to keep them from seeking jobs elsewhere. And this still goes on
today. You may not be completely happy with your job, but if it offers way more than what
everyone else is paying, you’re less likely to quit. Unions can also drive up wages. A union is
an organization that advances the collective interest of employees and strives to improve
working conditions and increase wages. They do this through collective bargaining. Representatives for the workers negotiate
with employers and if their demands aren’t met, workers go on strike, and stop production
altogether. Although unions were once very strong in the US, union membership and their
strength has declined since the 1950s. At their height, approximately 1 in 3 American workers were in a labor union. These days it’s more like 1 in 9, and the largest unions represent workers in the public sector, like teachers and firefighters. Wages might also not be at equilibrium when
there is a minimum wage — basically a price floor that prevents employers from paying
workers below a specific amount. Technically, in the US, minimum wage
affects less than 3% of workers. But the Brookings Institution estimates that
an increase in the minimum wage likely wouldn’t just impact that small slice of the labor
market. It would also drive up the wages of people who make just above the minimum wage.
According to Brookings, that ripple effect could raise the wages of nearly 30% of the
workforce. The debate over whether or not there should
be a minimum wage, and how high that minimum wage should be, gets pretty heated pretty
fast. Some classical economists argue against nearly all forms of government manipulation in competitive markets. They say the minimum wage not only leads to unemployment, but it actually hurts the people it claims to help. Their logic goes something like this: A minimum wage deters employers from hiring unskilled workers, hiring only skilled or semi-skilled workers instead.
These economists argue that minimum wage does little or nothing to alleviate poverty,
since instead of earning a minimum wage, unskilled workers end up earning no wage at all. The economists that support a minimum wage argue that real life labor markets aren’t as competitive or transparent as classical economists suggest. They believe that employers have the upper hand when it comes to negotiating wages and that individual workers lack bargaining power. I’m not going to tell you what to think,
but think about it like this: if a grocery store wasn’t required to pay $7.25 an hour,
and the grocery store was the only place hiring, they could likely squeeze individual employees to accepting lower than market value. In this interpretation, minimum wage isn’t interfering with competitive markets, as much as it’s correcting a market failure. Remember anti-trust laws that prevent powerful
monopolies from charging higher prices? Economists that support minimum wage laws say they prevent
employers from using their power to exploit workers. The economists who are entirely opposed to
minimum wage laws are losing the policy battle. Most countries around the world have minimum
wage laws, and many of those countries without them have de facto minimum wages, set by collective
bargaining agreements. But even among economists who support some
sort of minimum wage, there’s disagreement over how high that minimum wage should be, and what raising the minimum wage might do to the economy. Consider the U.S.: the current federal minimum wage is $7.25 an hour. In 2014, 600 economists, including 7 Nobel Prize winners signed a letter arguing that the minimum wage should be increased to $10.10 an hour. They argued that raising the minimum wage
could have a small benefit to the economy. Workers, with their newly increased wages,
would spend more. This would increase demand, and perhaps help stimulate employment. But some of those same economists balked when
it came to the question of raising the minimum wage to fifteen dollars an hour. They argue
that even if a fifteen dollar an hour minimum wage might make sense in an expensive city,
like Los Angeles or New York, where the median income is relatively high, it could have a
significant negative effect on employment in a city or town where incomes are lower. If economics was a pure science, we could
just test these ideas under controlled circumstances. We could have one state set a significantly higher minimum wage than its neighbor and see what happens. It turns out that happened in 1992, and
economists David Card and Alan Krueger studied it. New Jersey raised its minimum wage from $4.25
to $5.05 while Pennsylvania kept theirs at $4.25. The economists surveyed large fast
food chains along the state’s shared border and found that workers didn’t get fired, in fact, employment in New Jersey actually increased. But it’s far from settled. There have also
been studies that indicate raising the minimum wage DOES increase unemployment. A relatively
recent survey of economists, by the University of Chicago, found that a small majority think
raising the minimum wage to nine dollars an hour would make it noticeably harder for poor
people to get work. But, and this is where it gets interesting,
a slim majority also thought the increase would be worthwhile, because the benefits
to people who could find jobs at nine dollars an hour would outweigh the negative effect
on overall employment. Jacob: Very few economists argue a higher
minimum wage will end poverty, but some argue that it could reduce poverty. The minimum
wage doesn’t exist in vacuum. Policies that fight poverty should also focus on providing
education and skills. Adriene: Those skills are what the labor market
values. It’s those skills that are in short supply and high demand, and will command higher
wages. So, while you’re waiting for economists to figure all this out, you might want to
learn a new skill. Practice your double scissor, and maybe take Ronaldo’s job. Jacob: Thanks for watching Crash Course Economics, which is made with the help of all these awesome people. You can help keep Crash Course free for everyone
forever by supporting the show at Patreon. Patreon is a voluntary subscription service where you can help support the show by giving a monthly contribution. Thanks for watching! DFTBA!

100 thoughts on “Labor Markets and Minimum Wage: Crash Course Economics #28”

  1. Market transaction between single actors (consumers, companies) of course only take the selfish and most of the time short time narrow interests of the actors into account. They never look at the system effects – and they cannot take care of the SYSTEM of course.

    The people that are discarded on the labour market are desperately needed as consumers. That contradiction is lazily ignored in many discussions. It started to show in the 1970s – until then wages had risen with productivity almost in lockstep. So most of the gains and a lot of money ended in the pockets of consumers who SPENT the money creating tax revenue and revenue for businesses. (which translated to orders for other business, a livelihood and better for the biz owner, wages for many other employees, and more tax revenue. The government could spend that money, creating employment, revenuen for businesses which then owed taxes).

    High taxes for the wealthy and for profitable businesses sustained the Golden Era after WW2. The money circulated between workers, consumers, businesses (all of them also taxpayers) and the government who also took on the role of employer, giving our contracts and provider of services which reduced costs of living especially for the not so wealthy (free college education, Medicare, ..)

    The people the are the consumers mostly have their spending power from selling their workforce. They have LESS power (unless they are well organized, which the other players fiercly and in a long term project try to undermine).

  2. Not everything falls in place nicely if you leave it to individual transactions. Actually if it is a complex system, there is a very good chance it will not work out for the greater good. Usually some factor / actor / party has power power or effect – and will skew the system.

    Rebalancing systems with many humans DOES happen as well. The French Revolution for instance. Or WW2. Austerity stricken Europe after WW1, and it was worse in Germany because of the reparation they were forced to pay after having lost WW1.

    The Great Depression started an international trade war – most countries shut their markets down. Every country lost – as is normal in trade wars . Japan had industrialized in recent decases with U.S. help, China was their supposed market.

    But China had their own (brutal) reset going on in that time, so the Japanese didn't have that market available. And no exporting into other countries either. That supported nationalistic, fascist and expansionist tendencies in Japan. With an economy doing well, workers coming to modest wealth, most likely there would not have been the problem with them invading a lot of Asian countries (much like the Nazis did in Europe). Or attacking the U.S.

    It would be madness to think a remote dirt street in Alaska that sees 10 cars per day would need traffic lights. It would be equally foolish to assume the traffic of New York will fall into place nicely if people are just given a chance to work out between themselves.

    ….After all they have an interest in moving as quickly as possible through the city and not be harmed in the process. Likewise people know from studies that alcohol and drugs reduce their ability to react quickly. So surely out of sheer self-interest they do not drive under the influence.

    Right ?

  3. They start off with the most extraordinary example for "employment" star athletes (whose market value is boosted by the intenese marketing that is done around sports. incl. patriotism, singing the national anthem before a domestic game and what not. Not companies adverising for their product is not new – but the product is tied to a few humans – normally it is a service or a product not the performanc eof very few people that are sold.

    But glad you used the most untypical non-representative example you could find for your intro.

  4. You can't study issues like minimum wage without taking into account the negative effects of free trade with countries with lower wages and cost of living. If the US were n a trade vacuum, then yes by all means, raising minimum wage would be a good thing, but as soon as free trade is taken into account, it is disastrous.

  5. Interesting that any so-called economist would advertise a belief that prosperity can be created by the stroke of a pen (law enactment). Damn that Geo. Washington, if only he had signed legislation creating a $1MM/hr minimum wage the US would have had the most prosperous economy on the planet.

  6. This video completely fails to address the most significant aspect of this discussion. Automation is the central issue with regard to minimum wage hikes. The reality is once workers demand a wage that's more costly for the employer than it is to run a machine, guess what? They're out of work and millions of people now earn $0 / hour. It's precisely what every service industry CEO has said when asked about the $15 minimum.

    Plus, minimum wage is not meant to be a family's primary source of income. It's supposed to be an entry level position that acts as a stepping stone to upward mobility. You start out on the bottom and once you've mastered the job, you get promoted to management and off of minimum wage. I mean, I was getting minimum wage when I was in high school. It's not intended for heads of households.

  7. There's a little statue of that idiot Karl Marx on top of the bookcase behind the woman …
    a statue of Adam Smith would be more apt.

  8. The best way to raise wages isn't artificially with a minimum wage. It's by having a healthy economy and low unemployment. More people make $15/hr because of economic success than have ever gotten it by law, and this way is actually sustainable.

  9. They explained how supply and demand affects labor wages well then ignored it when it came to the minimum wage. If you increase the minimum wage you also increase the number of people who would be willing to work for that price. Because it is a competition those with more skills will end up getting the job. So when you raise the minimum wage you prevent those who have no skills and are trying to develop skills from ever entering the work force. Basically, the poor stay poor because usually people are poor because they lack valuable skills. If you really wanted to help the poor you would eliminate the minimum wage and by doing so create more opportunities for them to gain valuable skills.

  10. The fact is….American Jewry will never stop trying to talk American workers out of a living wage and they have been very successful for over 200 years. The top 1% of this country owns half of our wealth and they are the Jews.

  11. Raising the minimum wage (not like the raise based on inflation)is bad for the economy like a 15 dollar minimum wage would ruin businesses and that study used words like could and perhaps that are very vague and just look at Seattle by the University of Washington and it also locks out youth from getting jobs and it won’t help with poverty it will actually hurt them if you do big raises and causes automation and everything

  12. Crash course has really dropped the ball. The video about minimum wage is Jacobs Cliffords youtube is much fairer to reality. Its an economic fact that raising minimum wage has at least some negative effect on employment. Most of the economists who support minimum wage believe that the benefits outweigh the negatives, up to a point. Really disappointed with this show.

  13. Minimum wage priced me out of the market, I didn't have the work experience to justify it. I was told to go to college (get in debt) and come back to work as an intern WTF?.
    I found a better strategy, I lived with 4 roommates which lowered my living expenses. I worked as a contractor for under the minimum wage for a design firm. I was able to undercut many people to get work experience. I was technically a freelancer. I was able to learn new skills and references. I took those skills to other firms where I was paid above minimum wage. It took about a year and a half, but that beats going into college debt after 4 years.

  14. "[…]Employment at New Jersey actually increased"… Ok, but how did it compare to Pennsylvania? Without the other half of the study you can't actually tell its effect… not to mention that was supposedly the aim of the study…

  15. Its not really true though that education would improve poverty. In a countrys whose economy is based upon shoes instead of planes – like the example you gave in another video for China and US. In the US it would make sense to educate yourself and become an engineer – but in China educating yourself to become an engineer when the majoirty of jobs going are stiching shoes in sweatshops – would not elevate you out of poverty.

    The only reason I can see raising minimum wage not working – is because companies don't want to negate upon profit earnings. If they have to raise their wages then they will raise the price of their product – so they secure profit for themselves. In my view raising minimum wage would only work is if CEOs would be content to reduce their profit margins – which they are not lol – because they are greedy.

  16. First of all, this video is incredibly biased.

    Second of all, The minimum wage is almost entirely hinges on a demand side economy, which idiotically presumed that you can stimulate and grow an economy by making people want to buy more stuff.
    This is incredibly stupid, the only thing, that can ever grow an economy, is to produce more things, aka, increasing productivity. Demand is derived from what is produced, not the other way around.

    It’s the same dumb logic used for welfare and other handouts, taking a shovel in a sandbox, and taking a pile of one sand from one side of it and putting it on the other doesn’t increase the mass of that box. In the same way, you don’t grow an economy by just shuffling money around. That increases demand, but not production, maybe it changes the combination of goods produced, but the production possibility curve doesn’t shift.

  17. Unemployment rates drop due to slave poverty minimum wage people got to eat not even talking about the bills that need to be paid and won't get paid due to slave poverty wages business owners aren't going to do the physical work for their businesses they've never worked a minute in their stinking entire spoiled life they will LIE how they worked hard to get where their at leading to owning a business their mommy's bought them LIARS! but the constant LIE globally unemployment rate drops due to business owners and federal/local governments are so so so lovingly fair and caring my big left nut don't get fooled as you always are cause your 'sheaple people wolves are constantly screwing your butt hole for your hard earned pennies pathetic at least your working respect for that cause you have to eat good luck with the bills sky rocket high cost of living feel bad buts facts

  18. This was surprisingly bad.

    The reason some economists believe raising the minimum wage doesn't affect unemployment, is because a higher minimum wage will drag people who prefer other options to enter the labor market. For instance, someone that prefered to be on welfare or go to school instead, will now enter the market because the market wage "is too low". It's not about bargaining power.
    Suggesting bargaining power has something to do with it makes no sense, because if the above scenario was the case, then you would have upwards market pressure to raise the minimum wage, lest you be without workers.
    The above model is what is supposedly proven in the non-reproducably New Jersey study, which is always referenced by people who believe minimum wages does not raise unemployment.

    A minimum wage hike would only stimulate consumption (not the economy, but a specific part of it at the expensive of another, this is classic broken window fallacy) but it would do so at the cost of a rising standard of living cost as the cost of labor is carried over.
    Minimum wages do not affect margins for companies on gross.
    Neither does unionization. The US and UK which have low uninonization have larger wage shares in the economy than Scandinavian countries with high unionization. Unionization merely raises the wages of the jobs they unionize, at the expense of other workers or by creating unemployment.

    Also, supply and demand is ultimately not what deterimnes wages. It's called marginal productivity.

  19. A.wage that is equal to inflation is.possible.when people.stop focusing on the.Low wage earners and realize the.issue is salaries of.c.e.o.'s. Society depends on the jobs that low wage earners perform ,without them society would collapse. Low wages result in higher disease, crime, higher drop out rates and increase crime . Low wages create less consumers. Economy cannot sustain itself if it's not willing to pay workers enough to afford education. We depend on innovation to create opportunities that sustain society. It's not justifiable to think that we need poverty in order to maintain economy. Wages must go up and the salaries in the hundreds of millions must stop.

  20. 6:10 This argument that raising minimum wage will lead to greater unemployment for unskilled workers because their jobs will be taken by more skilled workers makes absolutely zero sense.
    An argument that businesses will be incentivized to automate jobs and remove them from the job market makes sense.
    An argument that businesses will go under because they cannot afford to pay employees a higher wage makes sense.
    But this idea that skilled workers will leave their higher-paying jobs because they can get paid "the same" to do a minimum wage job is absurd; there's no way the labor market wouldn't adjust skilled job wages to incentivize skilled workers to return to their trade.

  21. Why would you use a soccer player as an example? You could have mentioned someone like LeBron James or someone else that the average American would recognize. Who the frick follows soccer in America???

  22. LEARN A NEW SKILL!That should be the take away!If your town was created by a coal mine,and it is now closed,MOVE!

  23. The literature is pretty clear. Minimum wage hurts people. Time-series studies show a decrease in employment that would have existed or an actual drop in unemployment. Card & Krueger challenged the convention, but that doesn't mean the convention among most economics was minimum wage hurts workers. This also provides an incentive for people to switch to automation because automation is cheaper in the long run.

  24. This video 's audio is manipulated with a dark fluttering picture frame crop on the outer edges of the screen. Ten dollars went to fifteen when I covered my camera viewer it went back to ten dollar raise in minimum wage. my network administrators are acting like DICKtaters.

  25. Propaganda starts at @6:45. Lady suggest minimum wage protects against companies offering less than someone is worth despite the fact she correctly explained earlier that what someone is worth is determined by mainly supply and demand. (She also calls it a market failure which makes no sense at all). In her example she says "…and if its the only place hiring" but this is almost never the case. But it is far more likely in a town with enforced minimum wage laws. And after which says that economist against minimum wage laws are losing the policy battle but this is not an argument and I'd say it's mainly because people don't understand the full effect of minimum wage laws and only support it because it seems to be doing good.

  26. Remember, average prices in a specific economy depend on average wages per household. What this means is more money available in the economy drives up prices in that same economy. It would be nice if it were this easy, but unfortunately the country is made up of many little economies that not only interact within itself, but also other nearby economies.

    Generally speaking, every time you raise the minimum wage in a specific area, the average prices go up. The reason for this is that there's more money available then there was previously and people start spending more, so businesses raise prices. You can't ever get rid of poverty from minimum wage earners. Since the minimum wage is undoubtedly the lowest wage in the economy, the average wage per household will always be higher unless you're in a household with three or four wage-earners.

    One condition that I have not heard yet mentioned, is the concept that is similar to water flowing down a hill. About a decade ago in Michigan, when the recession really hit the Auto industry, there was a surge are people moving out of the state of Michigan and into the State of Arizona where I am from. Arizona is a very low cost of living state. Wages are low here, but so is the cost to live here. In New York City, what will happen to all the minimum wage jobs when employers start cutting back on jobs and those people move out of the state? Pretty soon, there may not be very many restaurant type businesses left in New York.

    Economy is very much like a baby's mobile that hangs above a baby's crib. They have objects that are balanced on bars that are suspended by strings connected to other bars. If you try to manipulate the balance of 1 bar, you end up messing with the balance of others.

    It sounds mean and cruel, but in order for some to live comfortably, others must live below the comfortable level. If everybody gets a raise, prices go up and it ends up that nobody gets a raise. Our real problem isn't the fact that minimum wage isn't raised to a high enough level, the problem is that since the 50s, there has been an explosion of minimum wage jobs due to the fact that more and more people are trying to make a living without trying to learn a skill or gain an education which has lowered their value. This country is now bottom-heavy with wage earnings.

    The solution is clear. Instead of raising minimum wage, we need to raise the skills and education of the average worker so that they are above the minimum. Let the minimum wage jobs be for the high school students and college students. This will lower the average wage per household, and everybody benefits. It is just not feasible for someone to expect to make a living off of a minimum wage job.

  27. 7:50 I don't know if they're deliberately misrepresenting or if they just haven't done their homework. The vast majority of economists believe the minimum wage should be abolished or kept the same in the US.

  28. You end with "economically stimulative ways…" By definition you just described how Demand pull inflation works… supply and demand. You widen spending by giving people money and this creates a lot more Demand, economic law shows you a contraction in supply will happen… No money needed to be printed…

    Yang is a moron, his followers like Yang and Bernie and get their economic lessons from people just like them and even people like you that know almost nothing about economics.

    Guys, spend some time watching Milton Friedman and Thomas Sowell… Give it a good weekend… I know they don't talk in 30 second sloghan sound bites where every dollar they spend magically turns into 10 bucks back but that's because you listen to politicians or people running to be a politician.

    No welfare program was sold the ignorant masses by saying, "This program has a great name, we polled it and it tests well! But that only a few years later it will fail to do as we said. Soon more people will be living in poverty while on this new program, it will cost 2-5x as much as we claimed and you will hate it so much you will support another welfare candidate with a new welfare program to replace this one."

    You guys are predictable, your "fresh face" and "new ideas" guys are selling you the same con they always have… You're the stooge, not the people pointing out who you're falling for a scam, again……..

  29. This is how a condom is talk about wages comparing multimillion-dollar sports players to regular everyday people this is just more propaganda when was the last time you knew an economist to be right never just more words once again we need a living wage for all people in the United States this is not helpful comparing regular people to multimillion-dollar singer-songwriters performers are athletes it just ridiculous and gets off the point please stop your videos are less than helpful for anyone

  30. I'm an independently wealthy loser still living in my parents' basement, so apparently this video doesn't apply to me.

  31. Union = mafia
    Teachers protect their jobs through unions, they don't have to be good at their jobs as long as they belong to a union

  32. "I'm not gonna tell you what to think", then you go ahead describe why you support minimum wage by metaphorically illustrating what you perceive to be the negative aspects of the no minimum wage argument. At that point, this stops being an educational video and becomes propaganda. There is nothing wrong with having your own opinions on issues at all but be forthright about it otherwise, you are being disingenuous by claiming to be making a purely educational video when its also peppered with your own biased opinions. That also goes for that little note on wage discrimination which is also disingenuous because its stated matter of factly without accounting for how much true wage discrimination factors into the wage gap in an economy but then again the intent here it seems is not to educate but to indoctrinate, I like this channel and a lot of the content is very informative however you guys should strive to just inform and let people make up their own minds instead of trying to push your own subjective ideology. Thank you

    One could ignore the Karl Marx bust in the background but after going through the whole video it becomes clear what your fundamental guiding principles are.

  33. but doesn't raising minimum wage, push anyone without an education, out of the labor market? if it costs too much to hire low effort jobs, then no one will be hired for them, since the cost is too high for it to be profitable. allowing people to take these jobs at a lower pay, allows them to get the experience they need to get a job that pays more and move up in society, especially if they didn't have a proper education.

    always, undebatably

  34. The video was logical until 3:30.
    Increasingly, anyone can work nearly any job from their own home (and yes, poor people in the US do have internet).
    The free market is 100% infallible.
    If you reject voluntary exchange/freedom, you are authoritarian/communist. It's that simple.
    NCAA players are great, but they are free to leave. Their salary of $0 is voluntary, making it inherently fair.

  35. There should be no minimum wage. Anyone should be able to start a business and hire people who are willing to work for them for whatever wage they both agree on and no one else has any right to put a gun to their heads forcing them to do otherwise.

  36. Just a few quick thoughts…
    1) If small start ups have to pay this, it will limit entrepreneurs from entering business. This is a big deal since about 80% of start ups fail in this country anyway.

    2) Depending on the type of business, the total cost of paying $15/hr. is from $22/hr. to $32/hr.

    3) Those who have never been in business or attempted have no idea what an owner goes through… I know a man who slept in his small office for months and ate popcorn for dinner… and people resented his success. How about those sleepless night trying to figure out how to pay your bills and cover payroll? I'm just saying that most people have no idea what it takes to start a business… the level of commitment.

  37. I have listened to both sides of the minimum wage debate and my conclusion is raise it to a living wage but do it gradually so small business can adjust and tie it to inflation.

  38. The argument has always been about the workers..

    but never has it tried to explain its effects on small businesses and start-ups..

    The minimum wage law little to no effect on large corporations or franchises.. they kill new competition of small businesses that cannot afford the doubling of their wage bill.. effectively killing them as viable competition for big corporations in the future..

    This leads to a monopoly of industries that unskilled or low skilled workers can start employment which over time leads to a saturation of same skilled workers, stagnation of career progress, lack of new business opportunities as competition, ultimately monopoly of industry by a few major players further enabling a price increase due to a lack of competition..

    The ripple effects on other related industries can be huge and detrimental towards a free and entrepreneurial society.. innovation and technology will be controlled, stifled, and withheld until the highest bidder is found.. and quite how high? Only time will tell..

    The only reason economist say that minimum wages are necessary in 'real world' economics is because they do not see the detrimental effect government involvement has caused to the free market..

    Having a partially free market means the market isn't free…

  39. Its sad that a millionaire would look someone in the face & say or think, "You're not worth $15 or 20 an hour." 😣😭

  40. Economics. The ultimate science of "Some says it is, some says it isn't."
    CEOs are paid obscene wages and are given golden parachutes even when they screw-up and are fired.
    A federal minimum wage increase is necessary because it doesn't let profitable companies hop to a cheaper state.
    What has really exacerbated things is illegal immigration and offshoring. That is a testament to just how greedy companies have become in exploiting cheap labor both foreign and domestic. That's why Tariffs are so sweet. Jack them high enough and it becomes cheaper — if the company in question wants to sell in the US — to make the product IN the US and avoid the Tariffs.

  41. I agree with the premise that employers systematically might try to underpay employees. Granted. But what I don't get is how to determine what the valid wage "floor" is. Like, $7.25 might just happen to be the fair amount for a pretzel making job. But if it is the ideal wage for that, then is it the ideal wage for someone sweeping floors? I am doubtful. So if the minimum wage could hypothetically operate based on "fair" prices based on different industries, I would support it, but as a one-size-fits-all approach, it kills more than it heals.

    And it is not possible (yet, at least), to have a per-industry or per-service/product minimum wage. Bureaucracies would not have access to all the information necessary to make these decisions in any acceptably efficient manner, even if they overcame corrupt practices. The Soviets tried central planning, and it failed also because they could not compute what was needed where efficiently enough. As it turns out, this is what markets do best, they transmit price signals. Now, I'm no purist on Austrian school economics, (although I'm no fan of "Keynesian Trash" XD) but I do believe they were correct about these sorts of programs not being practical, even in rare cases where they may be hypothetically possible.

    As to the utilitarian argument of a minimum wage increasing wages for some at expense of others' jobs – no. That's just wrong. Voluntarism should always be the default position, even if there are compelling reasons to abandon it sometimes. And just because that might help those families a small amount, it destroys the livelihood of those who are put out of work. In an ideal world, where everyone had sufficient skills and intellect for a job to be guaranteed somewhere, this argument would have merit. But our world has people with a tough start in life, and effectively forcing people on welfare is not a good solution, because of both the economic and spiritual downsides which come from a life of dependence, even if it is only perceived dependence.

    No hate.

  42. minimum wage is essential in rich advanced economies to counteract the impact of migration of the poor to those nations. Without the minimum wage, the floor price of unskilled work would continue to fall, while the rich pocket the additional profit of exploiting the poor.

  43. Businesses that can only survive by paying below a living wage do not have the right to exist, simple as that. The entrepreneurs and business owners will need to focus their efforts creating jobs that do economically justify a living wage instead.

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