mtfester@netscape.net wrote:
> Declan Murphy <declan_murphy@hotmail.com> wrote:
> 
>>Eric Takabayashi wrote:
>>
>>>Brett Robson wrote:
>>>
>>>>Who would pick cotton and wash your car if there were no poor people?
>>>
>>>People with proper wages.
> 
>>Proper is a relative term Eric. What is more likely is that if the
>>minimum wage was to rise too far above the market price for labour at
>>NAIRU, then the fall in the marginal productivity of labour relative to
>>that of capital would lead to structural unemployment amongst those who
>>until recently were enjoying the status of "people with proper wages".
> 
> Naw. The local (ie, "national") government would simply up the subsidy
> a bit.

Dead wrong. If you look around, you see that it isn't the case. Pick any 
OECD country that indefinitely subsidises the *full* difference between 
the marginal productivity of labour and capital in any industry? Even if 
they wished to, there is none. It can't be done. Substitution and 
structural adjustment will always proceed roughly in line with the 
productivity differentials.

>>In other words, most of the cotton would be picked by mechanical
>>harvesters
> 
> It is now.

Of course - see above. There was no upping of "the subsidy a bit". As I 
said, these outcomes are not necessarily a bad thing. Building, 
distributing, selling, or servicing mechanical harvesters "for a proper 
wage" is "better" than harvesting cotton by hand "for a proper wage". 
That the remaining workers are displaced is by the by. And if the price 
of imported cotton was cheaper than what could be mechanically harvested 
in Australia, the US etc then domestic cotton growing should also be 
unceremoniously dumped in favour of imports. The workers would soon 
enough find employment elsewhere.






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tee hee

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