remember, what abolishing the minimum wage would do is simply that - abolish an artificial control over the cost of goods along with labor. Whether those go up or down then depends on normal market forces rather than the whims of the price-setters. Wouldn't that be preferable?
Short answer: not necessarily.
It's also pretty clear that if McD's did suddenly decide to reduce pay by a significant amount (you used $4 per hour), they would have to close the doors pretty quickly: all those NMU grads would find something else to do for a business that could pay them $4.50. This is the "competition for labor" that we covered in chapter 1.
Another point worth repeating: If you look back through the history of the thing, EVERY TIME the minimum wage has been instituted or raised, the net result has been a LOWERING of "real" income and a subsequent LOWERING of the standard of living for everyone who works for money, whether more or less than minimum (virtually everyone, in other words). It's just how the world works.
It's not my intention to make fun of you. I admit it sounds great to say hey, we should pay people more money so they're richer! The sad truth is that it just doesn't work that way. It's not so easy.
I am a bit surprised that nobody explained this to Barry yet. Unless he's just posturing to gain the goodwill of the uneducated people.
Geezer keep it coming please, because arguing with libertarians is like arguing with members of a cult!
You need to post some of these studies of yours, complete with sources because I'm suspecting its off of the Ron Paul newsletter. Just saying "every study has shown..." is the sign of someone who's all bluster but doesn't want to back it up.
But, until you start posting studies, lets look at your answer. The "competition of labor" from your chapter 1 goes down to 4.50, so the NMU grads can still work there. Now, do you think in that case the market will dictate that the cost of goods sold will go down a similar amount? You avoided this question earlier, but I'll give it a second go. Why wouldn't they if everything works in the fish bowl you describe?
Mookie you're making stuff up! 1) Nice try, but the point of Obamacare is to bend costs DOWN, not up. Therefore business would be paying less over the long haul then they would have otherwise. 2) Businesses can very well pass some of the costs along, or eat some of the costs, etc.
See, the interesting thing is my family also owned one of these small businesses. In this case a big cost was insurance as well as local property taxes. Problem was we were selling a product or products that people could live without or could substitute. Say your insurance went up, or property taxes did. Consumers WOULD NOT bear the full brunt of rise in costs. So, if the biz was clearing say 100K a year, but insurance went up 25K, and the consumers were not willing to pay more to cover that, what do you do? You could close the business, but you'd be screwing yourself out of 75K in profit, or you could eat the cost and say 75K is greater than zero so I'll stay in business, or you could do combo of the two, perhaps look for other efficiencies but still have to accept less profit for a time. It may be small enough of an impact that you don't care, or its offset by a savings elsewhere. That's the real world. It ain't pretty, but you're not entitled to make the same profit level every year as you did the year before. That is a concept people seem to be struggling with.
I'm already quivering here in terror awaiting my dressing-down. Oy.