Wages have nothing to do with miserliness or generosity

john c. goodman

The brilliant economist John C. Goodman is out with another brilliant column. This one about the foolishness of minimum wage laws. See here. :

To summarize: a firm that pays workers more than they are worth cannot survive because it cannot match the prices and the rate of return to investors of its rivals. A firm that pays workers less than what they are worth, cannot survive because it will not be able to retain its employees. Competition in the marketplace tends to determine wages; there is a definite logic to what people are paid; and it has nothing to do with miserliness or generosity.