Sometimes people take half of Econ 101 and really run wild with it.
Labor markets are notoriously not ones that can be explained by simple application of the "law" of supply and demand. There are massive uncertainties in knowledge on both sides, power dynamics, high transaction costs, and substantial difficulties in knowing how much and of what type of value the employee will offer to the organization and the organization to the employee.
And even theoretically there are plenty of models where you're totally out there. Google monopsony and labor markets for just one situation where raising a minimum wage should increase employment.
Empirically, "it depends" seems to be the right answer, but even the most negative studies on minimum wages don't claim that minimum wages are in effect within an order of magnitude or two of what the financial crisis did to employment rates.
Comments
Sometimes people take half of Econ 101 and really run wild with it.
Labor markets are notoriously not ones that can be explained by simple application of the "law" of supply and demand. There are massive uncertainties in knowledge on both sides, power dynamics, high transaction costs, and substantial difficulties in knowing how much and of what type of value the employee will offer to the organization and the organization to the employee.
And even theoretically there are plenty of models where you're totally out there. Google monopsony and labor markets for just one situation where raising a minimum wage should increase employment.
Empirically, "it depends" seems to be the right answer, but even the most negative studies on minimum wages don't claim that minimum wages are in effect within an order of magnitude or two of what the financial crisis did to employment rates.