[extropy-chat] Seven cents an hour? (was: Riots in France)

[David Masten]

On Sun, 2005-11-20 at 01:01 -0500, gts wrote:
> On Thu, 17 Nov 2005 13:02:05 -0500, John K Clark <jonkc at att.net> wrote:
> 
> > In general if a worker is only worth 5$ an hour to his employer that  
> > employer hewill never pay him more than that unless he is running a  
> > charity; and if there isa law that says he MUST pay 6$ an hour then he  
> > will simply hire nobody.
> 
> More likely he will pay the 6$, raise prices to cover his increased costs,  
> and hope his competitors are forced to do the same.

Reality is somewhere in the middle. John is right that those workers who
are not worth $6/hr will be laid off, but many of the $5/hr workers will
be worth $6/hr. The demand for labor will decrease and since price is
fixed at a lower bound, some workers will be laid off.

Since Wal*Mart is coming under fire for low wages, they are lobbying for
a much higher minimum wage. Doing some googling, it looks like Wal*Mart
is pretty middle of the road for non-union general merchandise retail
wages. A higher minimum wage will hurt competitors, such as Target,
enough that Wal*Mart will be able to raise prices and survive.

-- 
David Masten <dmasten at piratelabs.org>