Micro 5.1 Market and Minimum Wage: Econ Concepts in 60 Seconds:- Economics Lesson

Mr. Clifford's 60 second explanation of the labor market for cooks and the affects of minimum wage. Remember that the firms are now demanding and individuals supply. Please keep in mind that these clips are not designed to teach you the key concepts. These videos are a review tool to help you better understand what you learned in class.

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[SkyHiRider]

Got a silly question: By increasing the minimum wage you said that the number of unemployed increased by those who lost the job + those who want to work after the increase (are motivated). Wasn't the second group that was motivated to find a job unemployed before and was therefore already in the unemployed category?

[ACDCLeadership]

@SkyHiRider It isn't a silly question. The second group were not considered unemployed before the miniumu wage becuase they were not willing to work at the equilibrium wage. At that low wage they were not part of the labor force.

[Neylonx]

@HardCoreProgrammer1 the demand for labour would be at 50, however the overall unemployment in the country would increase as more people would be willing to work, but nowhere would be willing to employ at supply level. Yes it can result in being counter productive, unions can do the same thing when negotiating pay rises, resulting in members getting laid off.

[Neylonx]

@HardCoreProgrammer1 This is old but w/e. Increased production costs leads to an increase in price and a reduction in demand. This would probably cause inflation as people desire what they had before and demand higher wages, however the point of minimum wage is to give enough money to get by on, so it is would be kept in line with inflation. The government would hope that gradually people would stop trying to get what they had before, reducing inflationary pressure. Employment would stay lower.

[SyriaInMyHeart]

I love you'r videos, they are the only tool that kept me up studying for my final exams. everytime i felt board of reading the books, i turn on you'r videos, and kept my lesson exiting.

thank you for these videos!

[qwinxtified]

awesome! i totally understood! rock on!

[TWEWY09]

dammit, i love this video, thankyou so much ^_^

really liked how you explained it fast without padding, whilst still being understandable

[Istanan79791]

Heyy You Scare me at the first :(

[HardCoreProgrammer1]

@ACDCLeadership

There are no two equalibrium points..wont the market end supplying at 120 quantity demend, when demand shifts to 120 workers at 15 dollars. or would the supply curve shift left to adapt to the point of equalibrium ...15 dollars at 50 quantity demands. It is actually a firms decision if it can or wants to bear the cost of labor price increase...so minimum wage can have a counter productive effect where employment goes down since a wage increase....

[HardCoreProgrammer1]

The short term effect is unemployment cause firms costs rise, but then the firm would hire more workers to produce the same quantity demanded of goods as before..right?

Minimum wages is a socialist policy causing waste by making surpluses with their price floors

[lujavana]

@LogicalFlawDetector wrong. the equilibrium wage is the wage at which the last worker is willing to work at that salary.

[LogicalFlawDetector]

The demand curve doesn't represent firms as you said. It's actually labor also. The supply and demand curves for labor meet at the equilibrium point -- which is the wage rate at which workers are willing to work AND the firms are willing to hire labor.