Comment: Krugman isn't capable of debating Rothbard...

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Krugman isn't capable of debating Rothbard...

...Kermit the Frog is more his speed.

Anyway, short course in minwage debate...very simple.

Learn this term: "marginal revenue product." That means the amount of additional revenue yielded by the addition of one unit of labor to a production process. For example, if I pay someone to work 1 additional hour at my factory, and I gain an additional $10 of revenue as a result, the marginal revenue product of that unit of labor is $10.

So, how much will I pay this person? He makes me $10/hour, so I will not pay him more than $10/hour. But competition between employers prevents me from paying from much less than $10/hour. So I end up paying him just under $10/hour.

Now suppose the gov says I cannot pay less than $11/hour. What will I do? I'll fire this person, because at $11/hour, I'm losing money by keeping him employed.

If the minwage is set at $11/hour, anyone whose labor is worth less than $11/hour will be fired...and that's why the minwage causes unemployment. It does not raise wages.

"Alas! I believe in the virtue of birds. And it only takes a feather for me to die laughing."