Month: December 2013

How The Free Market Deals With “Minimum Wage” or “Living Wage” Increases

Mulder

In 2013 there was a bump in discussion with regards to raising minimum wage to what is being termed a “living wage”.

Price Floor

Any Economics 101 student can tell you is that a minimum wage is a price floor. What price floors do is prevent the market from reaching the equilibrium point and in the case of a minimum wage (or living wage) they create a higher supply of people who want those jobs, and a lower number of employers wanting to provide those jobs. This in the very high tech economics language creates “waste”.

So how does the free market deal with minimum wage? Well in 2011, McDonalds in Europe knew that the job of order taker at McDonalds was a position that they could replace with cheaper order kiosks. So they replaced the jobs of hourly income earning people with kiosks.

And mark my words, if Ontario raises it’s minimum wage to the “living wage”McDonald's Kiosk level being asked for of $14 an hour, there will be no where left for students to find jobs. McDonalds will bring in kiosks. Mom and Pop shops will lay off students and work the extra hours themselves. The  black market “cash” jobs will make a huge comeback. Tax coffers will suffer as unemployment rises and underground employment markets thrive outside of the sight of the tax man.

What we SHOULD be doing is eliminating minimum wage. Let employers pay people what the job value is based on the supply and demand curves finding that equilibrium point.

Polar Ice Caps Grow 29% from 2012 to 2013

Mulder

And here we had everyone threatening global warming was going to melt the ice caps by the summer of 2013. Well lo and behold, they are actually growing.

A chilly Arctic summer has left 533,000 more square miles of ocean covered with ice than at the same time last year – an increase of 29 per cent.
The rebound from 2012’s record low comes six years after the BBC reported that global warming would leave the Arctic ice-free in summer by 2013.
Instead, days before the annual autumn re-freeze is due to begin, an unbroken ice sheet more than half the size of Europe already stretches from the Canadian islands to Russia’s northern shores.