Tyler Cowen wonders about the consistency of some economists who support modest increases in the legislated minimum-wage . Such support does indeed appear to be inconsistent with Keynesian theorizing about sticky wages. (Here’s the gist: If, as many minimum-wage proponents insist, a government-mandated higher minimum-wage will prompt significant numbers of employers to re-arrange work patterns and opportunities so as to extract more output per hour from each low-wage worker, why will not employers do the very same in response to workers who, because wages are sticky downward, refuse to lower their wage demands?)
Bob Murphy has more .
Mark Perry weighs in also here . (Oh, and Mark also shares with us this oldie-but-goodie worth-a-thousand-words cartoon from Henry Payne .)
Milton Friedman, in this three-and-a-half-minute long video, exposes the political reality fueling the legislated minimum-wage . (Starting around the 1:50 mark, Friedman says “The minimum-wage law is most properly described as a law saying ‘Employers must discriminate against people who have low skills.'”)