Friday, May 31, 2019

Zeynep Tons A Minimum Wage Essay -- elastic supply, demand, employees

The article that I am studying is Zeynep Tons A nominal wage tramper could help employers, too, in the Harvard Business Review. This article is a speculative piece about the effects of proposed minimum wage increases at the federal level. The causation takes a look at companies that superior wages and benefits for their industry. The underlying theme is that this is juxtaposed against a common argument that raising the minimum wage will be universally harmful. The common argument takes beginners level supply and demand graphs and uses them as the basis for the claim. The basic elastic supply and demand graph shows that as the toll of a good increases, demand for that good declines. Thus, if the minimum wage increases, businesses will face higher costs, will pass those costs onto consumers, will suffer debase profits or will reduce employment, or some combination of these negative outcomes. The author here is pointing out that the world is a heck of a attractor more comple x than that. Microeconomics does not end with the study of rudimentary supply and demand graphs, but incorporates a broader range of considerations into its arguments. The author highlights a couple of those arguments. The prototypical is the good jobs strategy. The second is the efficiency concept. The two are at times related. First, microeconomic principles can be used to examine the good jobs strategy. The author cites four firms in particular Trader Joes, Costco, Spanish supermarket chain Mercadona and convenience store chain QuikTrip. The author acknowledges that these companies do not have too legion(predicate) similarities, perhaps except for the nature of the goods they sell they are all in convenience and food retailing. This industry is characterized by a st... ...vers. Better people wont spend a penny for minimum wage, but better people make for stronger companies. And what of customers? There are price elasticities of demand to consider in this argument . They are not relevant at Costco, and Trader Joes is good value for its competitive niche, but many Americans are perfectly willing to pay a higher price for better quality. Yes, there are other considerations not mentioned here the effect of minimum wage on overall inflation and things like that but the article is a colossal starting point for understanding the complexity of microeconomic analysis that goes beyond the superficial analysis we often see in the media. Works CitedTon, Z. (2014). A minimum wage hike could help employers, too. Harvard Business Review. Retrieved February 2, 2014 from http//blogs.hbr.org/2014/01/a-minimum-wage-hike-would-help-employers-too/

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