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June 12, 2006



could be that there is no demand curve for labour? yes I think it could.


It's 20 years since I almost half-understood Sraffa - you don't really expect me to go back to him, do you?

Bob B

Could it be that migrants include a lot of non-competing groups?

A few years back I was exchanging what for me was an instructive series of emails in a web forum with a qualified psychiatrist and dedicated muslim who originally came from Afghanistan? I can't imagine him having much impact on the demand for minimum wage labour.

As for there being no demand curves, does anyone seriously imagine that the buyers in the supermarket chains think that way and make shelf-price decisions accordingly?


"aggregate demand curve for labour": what if the "curve" is subject to hysteresis, with one limb applying in good times and the other in bad? I wouldn't be surprised if the minimum wage has done pretty modest damage during the latter years of the Lamont Recovery, as we surely ought to call it, but will do dreadful damage when next we are in, and trying to recover from, recession, the Brown Bust.

Bob B

Something in the press a little while back reported that the minimum wage had been rising faster than average earnings and suggested that it is only now starting to bite. As reported, one sign of this was that wage differentials at the bottom of the earnings spectrum are starting to be compressed - which reduces the incentive to gain skills.

If supermarket buyers don't have much understanding of Sraffa, my guess is that they do have an intuitive appreciation of the principles of Ramsey pricing - according to which mark-ups relate to the inverse of the price electicity of demand.

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