Zeynep Tons A Minimum Wage Essay -- elastic supply, demand, employees

The article that I am studying is Zeynep Tons A minimal wage hike could help employers, too, in the Harvard Business Review. This article is a speculative piece about the effects of proposed minimum wage increases at the federal level. The author takes a look at companies that superior struggle and benefits for their industry. The underlying theme is that this is juxtaposed against a common contrast that rise the minimum wage will be universally harmful. The common argument takes beginners level add together and demand graphs and uses them as the basis for the claim. The basic flexile supply and demand graph shows that as the cost of a near increases, demand for that broad(a) declines. Thus, if the minimum wage increases, businesses will face higher(prenominal) costs, will pass those costs onto consumers, will suffer lower profit or will reduce employment, or some combination of these damaging outcomes. The author here is pointing out that the world is a heck of a ch ance more complex than that. Microeconomics does not end with the study of rudimentary supply and demand graphs, but incorporates a broader range of findations into its arguments. The author highlights a straddle of those arguments. The first is the good jobs strategy. The second is the efficiency concept. The two ar at times related. First, microeconomic principles can be used to probe the good jobs strategy. The author cites four firms in particular Trader Joes, Costco, Spanish supermarket chain Mercadona and convenience store chain QuikTrip. The author acknowledges that these companies do not have too many similarities, perhaps except for the nature of the goods they swap they atomic number 18 all in convenience and food retailing. This industry is characterized by a st... ...vers. Better people wont work for minimum wage, but expose people make for stronger companies. And what of customers? There are price elasticities of demand to consider in this argument. They are not relevant at Costco, and Trader Joes is good value for its competitive niche, but many Americans are perfectly instinctive to pay a higher price for better quality. Yes, there are other considerations not mentioned here the effect of minimum wage on overall inflation and things like that but the article is a abundant starting point for understanding the complexity of microeconomic analysis that goes beyond the superficial analysis we often see in the media. Works CitedTon, Z. (2014). A minimum wage hike could help employers, too. Harvard Business Review. Retrieved February 2, 2014 from http//blogs.hbr.org/2014/01/a-minimum-wage-hike-would-help-employers-too/