ECON 20 Lecture Notes - Lecture 20: Working Poor, Price Ceiling, Deadweight Loss
3 Dec 2020
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Document Summary
Some economic studies suggest the demand for unskilled labor is quite inelastic in some industries. So a hike in the minimum wage would not cause much unemployment. : fast food- you cannot outsource hamburger and fries production to a foreign country because it has to be made where the consumer is right here on the corner. But low-skill labor can be replaced by machines (computers and robots) if the wage goes too high (substitutes in production) Under rent control, the height of the demand curve indicates some people would be willing to pay more. Landlords and building superintendents will try to extract extra fees and accept bribes. The apartments end up going to the richest people. Under the minimum wage, the height of the supply curve shows that some people are willing to work for less probably legal and illegal immigrants and others who are desperate. The poorest of the poor become even worse off.
