From: rhinoceros (rhinoceros@freemail.gr)
Date: Sun Oct 26 2003 - 10:47:58 MST
[simul]
You proposition is that employers won't "magically" come up with more money.
Say an owner earns 5 million in profit off of labor, employing 50 people. This owner is then forced, because of unionization or populist laws, to pay everyone an extra 20,000 per year.
The owner now earns 4 million.
The money comes out of the profits for the owners of a business.
[Lucifer]
Your scenario is handled adequately by competion in the employer market. If the industry can really generated $100,000 profit per employee as you stipulate, a competitor would certainly hire all those workers away for $20,000 extra per year. No unions or populist laws would be necessary.
But your example is totally unrealistic if we are talking about minimum wage, especially when you consider that an extra $20k per year amounts to an extra $10/hour.
Let me bring up the volunteering argument again. Do you really think it should be illegal to volunteer your time? If not, isn't that inconsistent with minimum wage laws?
[rhinoceros]
A problem with putting simplified mathematical models to general use is that their are unreal. These models tend to assume instant availability of all information, availability and instant transportation of jobs and employees, and they often treat both employees and jobs as unidentifiable items in two big pools. It has been argued that an open market has never existed in this world. I think there are very material reasons for that.
I have heard, for example, that in real economics the existence of a decently sizeable unemployment pool is considered good for the "competitiveness of a national economy" in the international arena. Criteria, indicators, measures, but what is amusing is when you hear this kind of talk from an unemployed person at the coffee house. It sounds like a football fan talking about his favorite team.
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