Thursday, July 19, 2012

Wage Gap

The wage gap is something often talked about in today's economy.  I would like to inquire about a theory I have of why the wage gap is so vast.  I theorize the the idea of a minimum wage does not promote an equal share of the money supply.  While that may seem counter-intuitive, I would argue that a minimum wage actually brings other wages in the market down as well.  The reason being is that an employer will hire someone worth a few more dollars than the minimum wage for that minimum wage amount.  This is possible because the wedge the government has created between the desired lower wage for some employees offsets the higher wage desired by others and in essence creates a lower wage for overall even though it is granting a higher wage for a few employees.  The lower wage overall only increases the wage gap between the middle and lower classes and the upper class. 

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