Alabama reports second fastest unemployment rate drop. HB56 at work - Page 2

Since economics is not your area of study, I'll make it easy for you to understand. The demand for jobs by employees meets the supply of jobs by employee in an efficient job market.

The minimum wage, however, forces the employees who wants to work for less than the minimum wage, not to work and also forces the employers who are willing to hire for less than minimum wage not to hire (perhaps the business owner might go out of business if they pay minimum wage and therefore, doesn't make business sense for him to hire).

The minimum wage creates a dead weight within job demand & supply and higher the wage rate, bigger the dead weight.

If this is the case, minimum wage forces those who wants to work for less than minimum wage to go unemployed and the unemployment rate rises, while at the same time, the employer can't receive the man-power that he needs, therefore, the minimum wage (or higher wage) forces a more inefficient and less productive economy.

Micro-economics 101.

Touché.

Exactly, and higher wages don't always equal higher productivity, or pizzaboys would be making 100 an hour

That point I will stick to. I've worked at both Fedex and UPS, and Fedex pays more. We worked in a place where the two companies were on the same street. The Fedex guys always loaded and unloaded the trucks faster. Knowing that you are being paid more to do the same job makes you work harder.

Sample size is 1 and a confirmation bias exists.
Nonetheless, monetary incentives are way to make employees increase productivity, as several studies have shown. Find me a study showing a negative correlation with increased incentives and maybe I'll concede on that point as well.
Psychology 101

But what if there were no minimum wage and 10 Fedex guys gets paid $1/hour to load and unload the trucks instead of 1 Fedex guy getting paid $10/hour to do the same job? In terms of productivity and efficiency, which will be better?

If the minimum wage did not exist, the price of Fedex service will decrease, and of course, not only for Fedex but the price of living will decrease as well, resulting in an overall decrease in inflation, which will benefit you personally because $100,000 that you have in your savings account will not be worth $90,000 5 years later (inflation is inevitable but will rise at slower rate making your $100,000 worth more than $90,000 5 years later, presumably, whatever the inflation rate might be).

If life were as easy as Micro 101, we wouldn't need advanced micro.

Without a minimum wage, you also open yourself up to strike busting and exploitation, even with the deadweight loss from having a minimum wage. There are more important things for a society than productivity, including making sure that everyone is at least at a baseline. Given the current level of economic inequality, any attempt to do away with the minimum wage would create a system that pushes for the negative incentives I mentioned.

Obviously, Micro 101 doesn't address every detail of today's extremely complicated economic system. That would be ludicrous.

I don't think you understand the concept of the dead-weight loss. The dead-weight loss refers to the loss in productivity from the people who are willing to work for less than the minimum wage and the people who wants to hire for less than the minimum wage. Because of the minimum wage, the people who are willing to work for less than the minimum wage are unemployed and forces the people who wants to hire for less than the minimum wage to not get the help that they need which result in lose-lose situations for both parties.

And you realize that most people who bust out in strikes are those who are unemployed? Look at how much % are unemployed young people in Occupied Wall St.

My answers regarding productivity were merely based on a previous reply by waterwise 12 who said "higher wages forces more efficiency and productivity within our economy."

What's the baseline? If the minimum wage were $2/hour your Big Mac will cost $1.50. If the minimum wage were $20/hour, the price of living will increase accordingly and your Big Mac will cost $15 (as an example).

You can raise the minimum wage all you want, it wouldn't make a difference in regards to the benefit of the people since the price of everything else and the inflation rate will rise with it accordingly.

Thanks fellow members, I was able to get a crash course in economics with your comments. But I do hope that Alabama, that they will realize the truth about the real implications of HB56.

It is never that easy to live in the middle of financial crisis. Nov revealed more state unemployment figures decreasing than in any single month for the last 8 years. Forty-three states reported a decrease. Article source: Unemployment rates drop in most states

And the people have expressed a desire to have a certain quality of life that isn't possible making less than $7 an hour. It's a lose-lose for undocumented immigrants and employers who want to take advantage of them more than it is for U.S. citizens.

The definition of a strike usually doesn't include unemployed individuals; strikes consist of employed persons who stop working or withdraw their services to protest against an employer or get the employer to agree to their demands.

Not a bad theoretical example, but it'd be nice to see it backed up by data. You're making a lot of unstated assumptions, including that there's no other source of inflation and that the producer will always choose to push the burden to the consumer. But that's not exactly true. When people push for a higher minimum wage, it's because inflation's already been screwing over real incomes on the lower end of the scale. Raising minimum wage doesn't necessarily make that worse.

Same as above, though I don't think anyone would reasonably want us all to make $40 an hour because of minimum wage. That magnitude of an increase would probably lead to the cost-push inflation you were describing.