Home Forums Principles of Economics Minimum wage and power imbalance Reply To: Minimum wage and power imbalance

  • Gerald

    May 15, 2021 at 15:23

    Hi Michal
    Thanks for the post. I’m glad that you can at least see the problem I’m talking about. This isn’t a perfect world and idealistic solutions (the perfect) can be the enemy of pragmatic solutions (the good enough).

    Logic tells us how a truly free market would operate, and if the market were truly free, then minimum wage would be harmful. Unfortunately, the real market is never entirely free. And in this world of fiat currency and government manipulation, the market is not at all “free.” I believe Saif would agree with this point. He even makes this point, explicitly in his book on the fiat standard.

    The short term solution for the best of society has no obvious answer. I don’t know if a minimum wage would do more good than harm, but doing nothing will be worse. Waiting, maybe forever, for the skewed market to fix everything is not the best thing for society right now.

    My opinion is that minimum wage will be a useful stop-gap solution in the short term. If anyone can think of a way to tweak minimum wage to protect the inexperienced, or offer an entirely different solution, I’m very open to suggestion.