SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Pastimes : Austrian Economics, a lens on everyday reality
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Don Lloyd who wrote (190)4/23/2003 2:10:02 PM
From: gpowell  Read Replies (1) of 445
 
Minimum wage laws do more than increase the unskilled unemployment rate. By not allowing the market to clear, inequities in the allocation of jobs through favoritism can occur. Combine that with a generous welfare system and one would expect the creation of a persistent economic underclass.

Any institutionally caused increase in wages will create multitude inequalities. Labor unions are a good example. I used to be a teamster – many years ago – after a few years in the union I realized I needed protection from the union rather than my employer.

In the US, trade unions tend to create a bifurcated job market, in effect union worker’s higher wages (above market clearing) are wages “taken” from non-union workers. Powerful unions combined with socialist governments, such as those in rumsfeld’s “old” Europe cause both high unemployment and lower productivity.

One caveat is that workers and jobs are not homogenous, so there is some natural limit in the ability of unions to “take” from other workers.

Btw, union power is at it’s strongest within monopolist, or at least oligopoly, industries. The airline industry is a good example. The old airlines created and grown under federal regulation had some of the strongest unions in the country. Since deregulation they’ve experienced a continuous erosion of their ability to demand higher wages.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News