Rebuttal to "The Rich Get Richer"

This is in response to Suburban Don’s post yesterday, The Rich Get Richer.

Firstly, I would like to start out by saying the ministers deserve the raises they are getting. Why add an irrelevant variable such as inflation into the mix when you just ranked them? We’re the 3rd largest province so don’t government officials deserve the 3rd largest salary?

Secondly, minimum wage has been shown in Economics models to NOT be an effective economic policy. In fact, I say scrap the minimum wage. Let the free market determine what wages should be. Currently, there is a surplus of labour demand compared to supply, meaning more demand for workers than workers available to work. It’s rare to find somebody getting paid minimum wage. If someone is, then they’re stupid and should look for a different job as there is a surplus of well-paying jobs available, regardless of education.

What happens when there is more labour supply than demand? People will migrate until we reach equilibrium. A free market mechanism is always most efficient.

The only thing an increase in the wage floor will do is hurt businesses. Think restaurants where workers earn hourly wages + tips. These workers will become overpaid at the expense of businesses.