Minimum Wage: Everything You Need to Know in 15 Minutes

This video reviews the Econ 101 textbook treatment of minimum wage and then goes deeper in terms of reviewing some ideas that have emerged from recent research. How does a market with only one employer impact the effects of minimum wage? What if we do sector-specific minimum wages? How does market concentration of employers affect workers? What's special about rural areas of the USA in terms of the labor market? These topics and more in this video.

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[ernestjones]

I wonder if economists study the effects of not being able to live in a home and other quality of life info. Do they care?

Note that the actual minimum wage is $0. Those working at this wage have a terrible time with no demands placed on them, but survival is difficult.

Let's raise this minimum wage with an employer of last resort program (aka Job Guarantee) so that no one needs to live in destitution.

[childofgod]

I feel as if the Supply and Demand curves don't apply exactly how you specify here.
For instance, you assume that if the minimum wage goes up the supply (amount of hours workers are willing to work) also goes up.
I don't believe this is entirely accurate. It's not as if there are people sitting at home waiting for a higher minimum wage in order to go out and get a job. Turns out if you don't have a job you also probably don't have a home to sit at. Also, you assume that as the minimum wage goes up everybody would want to work more hours. I also don't believe that is true either; perhaps it is true for some workaholics, but it's definitely not true for everybody. The current minimum wage is $7.25/hr, if it were to be raised to $15/hr, people who are currently working 40+ hours a week at minimum wage would only have to work half as many hours under the new minimum wage in order to make the same amount of income. This would be an incentive to spend more time doing things that they otherwise couldn't do.
As an example: assume I work 40 hours a week at $7.25/hr. That's $290/week (to keep things simple let's pretend my income is not being taxed). Now suppose the minimum wage is raised to $15/hr. At $7.25/hr I was just barely scraping by, but now I am able to make the same amount per week ($290) by working just over 19 hours a week. Of course I'd be perfectly happy making more than I did before, so I decide to work 35 hours a week. Now I'm making $525/wk and working 5 fewer hours. Why am I not still working 40hrs/wk? Because I have a family at home and I want to spend more time with them. I get to bond with my gf and our newborn son and my opportunity cost is $75, but I'm still making almost double what I was before the raise.
5 hours a week may not sound like a lot, but over the course of a year that's 11 days. My annual income went from a little over $15k to $27.3k and I also have 11 more days of free time.
I have not done any research or polls asking for other's opinions about this particular question, but I would wager most share a similar mindset. People enjoy having money, but people also enjoy spending more time not working. If people have the ability to make a higher income I really don't think many would want to work more than before.

[ernestjones]

So minimum wage is price fixing. It requires government bureaucrats to be smarter than is realistic. And therefore has unintended, and probably undesirable consequences.

With the implementation of a Federal Job Guarantee program providing an employer of last resort, then the unqualified workers who cannot find a job do not have to go hungry and die. Instead they can provide a stimulus to the community plus the community benefits from what they do with their hours. The economy will then automatically adjust to an equilibrium with the Job Guarantee wage being the minimum wage.

The stimulus would automatically be lowered as people find better paying jobs in the private sector. The stimulus would automatically grow as people lose private sector employment.

So a Job Guarantee program actually succeeds in better managing an economy than price controls do.