The wage scale can be thought of as a ladder. Once someone can latch onto the bottom of it, he can begin to climb upward. What minimum wage laws do is saw off the bottom rungs on this ladder for far too many young, want-to-be workers. Wages are determined by and large by a worker’s productivity. A smart businessman only hires those workers that he can make a profit from. A worker who produces $10 in output per hour at a wage of $9 an hour makes the entrepreneur $1 in profit. Karl Marx saw the extra dollar as a form of exploitation. Economists have pointed out, however, that the entrepreneur needs an incentive to risk his own capital. rare.us/story/raising-the-minimum-wage-is-all-the-rage-but-the-winners-arent-who-you-think/#sthash.cNdHcslX.dpuf
Posted on: Fri, 15 Nov 2013 23:45:15 +0000