1. Does Minimum Wage Help the Working Poor?
Logical Reasoning: Using Supply and Demand, I can explain why raising the minimum wage is a good or a bad thing.

2. MINIMUM WAGE HURTS! Logical Reason #1
A higher minimum wage decreases the productivity of companies. The cost of inputs is increased. Therefore, companies cut hours of their employees and supply or production decreases.

3. Businesses decrease the amount they can produce
Businesses decrease the amount they can produce. This decreases supply and raises prices
supply
New Price of Goods
New Quantity of Goods
Original Price of Goods
to reference
demand
Original Quantity of Goods
Quantity of goods

4. MINIMUM WAGE HURTS! Logical Reason #2
A labor market with a high minimum wage causes unemployment because setting a high wage causes a surplus of labor.

5. The Minimum Wage Hurts the Poor!
A Labor Market with a Minimum Wage
Wage
Labor
supply
Labor surplus
(unemployment)
Minimum
wage
Quantity
demanded
Quantity
supplied
Good thing or a bad thing? S and D says not the best ting
Labor
demand
Quantity of
Labor

6. MINIMUM WAGE HELPS! Logical Reason #1
Although Economic conservatives argue that an increase in Minimum Wage will cause unemployment, the change will be small because of the inelasticity of demand (and supply) for low wage labor
1st period, 2nd period?

7. Why is there elasticity of demand for low-skilled labor?
Question 1: Can the purchase be delayed?
NO. You can’t have a store/factory without people working there. You need to purchase NOW.
Question 2: Is it a significant portion of their income?
NO. Low wage workers make up a very small proportion of a company’s expenses because they get paid such a small amount. The higher wage workers make up a much higher amount.
Question 3: Are there easy substitutes for the low wage labor?
NO. It costs a lot of money to find new ways to do things that your employees can do (Automatic check outs, machines, robots)

8. Graph of Logical Reason #1
Wage
Labor
supply
SMALL: Change in labor
Original
employment
inelastic curve – even if you raise the price (wage) you are not going to start firing workers at …
Idea behind supply is that low mini wage or high– everyone is trying to eat so everyone has to work if mini wage is 7.00 cool if it is raised to 10.0 there is not going to be a massive influx – you will not get a huge shift in unemployment because of mini wage increase
Labor
demand
Quantity of
Labor
New employment

9. “Raising the minimum wage suddenly, in one big overnight jump with no advance notice, would cost some jobs in the short term. This is offset by increased spending power of the poorest workers, which creates some jobs. It might be a net positive. It is definitely a win for workers. But focusing on the short term only is short-sighted. In the longer term, rents charged to businesses fall because of elasticity of demand. Does anyone think the main problem with our economy is that dollars into the cash register go too much to workers, and not enough to property owners?
As wages for the poorest workers become a little more livable, the rental costs for starting a business will become a bit more affordable. And I see that as a good thing.” - Dailykos

10. MINIMUM WAGE HELPS! Logical Reason #2
A higher minimum wage increases productivity of labor. Workers do not want to leave their jobs, so they stay longer and work more efficiently. This increases the supply of goods produced in a society.
5th period

11. If people are working harder, companies that use low-income labor will produce more goods!
supply
Original Price of Goods
New Price of Goods
New Quantity of Goods
demand
Original Quantity of Goods
Quantity of goods