A while back an Econo-dunce denialist advanced the idea that a minimum wage increase was self-destructive, leading to greater unemployment. It was the typical static analysis, wholly ignoring the income-multiplier effect of higher middle class revenue. There is no question that the marginal product of labour is the MAXIMUM wage that a company can afford to pay, but it is by no means the MINIMUM wage that a company will pay.
Under the Grapes-of-Wrath Third World economy that we live in currently, the market-based minimum wage approaches $0. Three billion people subsist on $2.50/day, which is the de facto marginal minimum wage. For what it's worth, I favour balanced trade and a reverse tax credit for lower income levels, but all of that would make way TOO MUCH fucking commonsense, so instead we wait until the status quo race to the bottom lands with a colossal thud.
Part of the above argument against a minimum wage, features the standard Econ 101 upward sloping supply curve meaning that as wages go lower, less labour will be supplied. Implying that as wages are lowered people will choose not to work, because in ceteris paribus land, starving is the solution for low pay. Sure. Obviously it's the exact opposite in the real world - additional play-time is the dominion of the extremely well-paid while bony fingers and longer work hours is the dominion of the underpaid.
But why take my word for it, let's turn to the oil market to see another example of an upside down supply curve:
Race to the bottom Visualized:
Oil production (red) is rising as oil price (black) falls. Under a high fixed cost operating model, producers will increase supply to offset the lower price, to stabilize revenue:
Fracking ETF:
First one to the bottom, loses everything.
